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The Value of Extra-Financial Reporting

The Value of Extra-Financial Reporting

Following the crisis, society is demanding that companies go beyond publishing their financial figures. The role large corporations’ play in society is now under the microscope and companies need to demonstrate their commitment to transparency in order to restore confidence with their stakeholders. This includes reporting on their environmental, social and governance factors in addition to their financial performance. France has taken a leading role in furthering the cause of extra-financial disclosure.

The Grenelle II Act, passed in 2012, is evidence of this advancement. This legislation requires that many listed companies on the French stock exchanges produce CSR reports in addition to their annual report.Moreover, France is breaking ground compared to the EU, where only 6% of the top 40,000 listed European companies publish a detailed CSR report. The European Commission is working on a proposal to align countries in order to increase transparency and develop universal standards.

How we play our part – France Initiative

The Mazars France team conducted their 4th annual study, “Best Practices and Trends in Non-Financial Reporting in France,” which deals with the social, environmental and social reporting of listed companies in 2013. They analyzed the annual reports of 70 companies from the CAC 40, CAC Next 15 and last 15 capitalizations of the SBF 120. Key findings include:

Corporate Transparency – Published information widely accessible

  • For the year 2013, almost the entire panel (98%) dedicated a chapter of its annual report to social, environmental and societal impacts.
  • Average number of pages dedicated to CSR is increasing from 40 pages in 2012 to 47 pages in 2013
  • 40% invite stakeholders to access more details on their website

External Auditing – For the first time, non-financial reporting is mandatory

  • 95% of companies in the panel included the non-financial audit report in their management report
  • 86% asked an independent and external auditor to certify data

Integrated Reporting – Hesitant first-steps towards integrated reporting

  • 5% of companies made reference to the concept of “integrated reporting” in their annual report (versus none in 2012)
  • Some companies are beginning to publish indicators linking CSR issues with economic performance

3 Key Focuses – What non-financial information did companies focus on?

  • Economic, social and territorial: 55% communicate their quantitative and qualitative impacts
  • Greenhouse gas emissions: 58% publish quantified targets
  • Raw materials: 36% have an internal process for recycling

Read the full report (in French) by visiting the Mazars France website here.

Emmanuelle Rigaudias. Partner, Head of CSR & Sustainable Development Department. Mazars France

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