The Statement of Non-Financial Information and its impact on business strategy

Estado de información no financiera, estandares GRI y estrategia empresarial | Qaleon foto

The Statement of Non-Financial Information and its impact on business strategy

Non-financial reporting, GRI standards and business strategy | Qaleon

The Statement of Non-Financial Information (NFI) is a mandatory document for an increasing number of companies and organisations, as stated in the Spanish law 11/2018This is the result of the process of transposition into Spanish law of Directive 2014/95/EU of the European Parliament and of the Council of October 2014 amending Directive 2013/34/EU as regards the disclosure of non-financial information.  In this legislation, organisations that meet certain requirements are obliged to report on the following matters:

  • Environmental impact and sustainable development
  • Environmental impact and sustainable development
  • Social issues of staff
  • Promoting corporate transparency

Non-financial information is information related to social and environmental issues related to the company. In addition to being recommended, for many companies it is even mandatory by law to have such a report at the end of the financial year.

How is the non-financial reporting done and what does it include?

The most important thing is to know which companies are obliged to do so. Since Spanish legislation (Spanish law 11/2018) or from different countries obliges certain companies to submit such a report.

Companies are obliged to carry out the EINF if two or more of the following conditions are met for two consecutive years:

  • Companies with assets of more than 20 million euros
  • Organisations with a turnover of more than 40 million euros
  • Companies with more than 250 employees

The next step is to produce a non-financial status report. In order to do this, it is necessary to have relevant, consistent and comparable information related to the corporate social responsibility of companies. In this way it is possible to measure, evaluate and manage the performance of the company and its economic, social and environmental impact.

What are the GRI standards?

The Global Reporting Initiative (GRI) is an organisation whose primary mission is to help companies take 'responsibility for their impacts'. They do this through the GRI Standards, which are used for sustainability reporting. It is one of the best known non-financial reporting models internationally.

These GRI standards are primarily designed to be used in conjunction with each other when preparing sustainability reports focusing on material issues. The three universal axes on which the GRI focuses are applicable to any organisation preparing a sustainability report. sustainability and hence as a result the EINF is also called a triple non-financial report.

There are currently 38 GRI standards. The first are universal, i.e. they must be used by all companies reporting non-financial information. Meanwhile, the GRI standards numbered 200 correspond to economic issues, 300 to environmental issues, and 400 to social aspects. From these last three blocks, each company should choose for its reports those that relate to its material issues.

Why are they important for the non-financial information statement?

On the one hand, because it is necessary to comply with the current legislation. In Spain and in most European countries, large organisations are obliged to present their non-financial report in accordance with legislation.

In addition, the presentation of the EINF is an exercise in transparency that helps in the dialogue with stakeholders, especially investors, which makes the company more attractive.

On the other hand, as the GRI standards are focused on material issues, cost savings can be made. It allows to anticipate risks derived from environmental, social and economic issues and therefore helps to reduce costs derived from these areas.

Además, permite aprovechar oportunidades para desarrollar nuevos productos o servicios de acuerdo a las necesidades de los consumidores, permitiendo anticiparse a la competencia e creando barreras de entrada más consolidadas. Junto a ello, genera buena imagen frente a la sociedad y la opinión pública.

Ultimately, sustainability reporting against these standards provides information about the positive and negative contributions of organisations to sustainable development. Thus, in accordance with the GRI standards, it provides a balanced overview of an organisation's material issues, related impacts and how it manages them.

A perfect tool for GRI standards and the EINF

Sineqia by Qaleon is a business intelligence solution that collects environmental, social and environmental impact data as well as governance criteria and displays a diagnosis of the company's sustainability and actual situation. It provides a real-time and historical view of the company's non-financial data and allows you to take measures to improve corporate sustainability.