ESG (environmental, social, governance) reporting is the talk of the Office of Finance. Does our company need to start thinking about ESG? When do we need to start reporting on our ESG efforts? And most importantly, how do we do this?
There are many approaches: leveraging existing investments in planning software and data analytics, relying on home-grown solutions, purchasing new, purpose-built applications, and more. One aspect of the ESG reporting continuum is that of narrative reporting.
In July 2022, Revelwood’s partner, Fluence Technologies, acquired Sturnis365, a solution for collaborative disclosure management and narrative reporting. “[The Sturnis365 acquisition] complements Fluence’s robust, enterprise financial consolidation, close and reporting solution, enabling time-pressed finance departments to spend more time on analysis while addressing broader mandates for narrative reporting, including internal board books, investor presentations and more stringent ESG reporting,” said Robert Kugel, SVP and Research Director at Ventana Research.
What is Narrative Reporting?
Narrative reporting goes beyond the numbers – and statutory disclosure – to automate the production and distribution of any internal or external report. It enables you to combine and consolidate financial, operational and external data sources and narrative text components such as management letters and notes to financial statements. It allows for input from multiple contributors from across a business – from auditors to executives.
Fluence states, “Bringing financial and non-financial together through integrated reporting sets you up to tell a more meaningful story about the business … You can tell those stories through an annual report, board books, lender reports or other investor updates.”
Narrative reporting provides meaning and context to your reports.
Narrative Reporting and ESG
According to Accenture, 68% of CFOs globally take responsibility for their organization’s ESG performance. ESG reporting encompasses non-financial data that needs to be linked to financial information. ESG metrics can help uncover business opportunities, attract investors and offer a competitive advantage. More and more companies are incorporating ESG concerns into capital allocations and plans. Sustainability is falling under organizations’ enterprise risk management strategy. All of these factors point to the significance and importance of reporting accurately and thoroughly on ESG. But numbers alone won’t tell the story.
“Organizations need to understand their ESG reporting obligations – today and into the future – and this reporting responsibility typically falls on the Office of Finance,” said Michael Morrison, CEO, Fluence. “At Fluence, we are committed to addressing these ESG reporting needs with our modern consolidation, close and reporting platform.”