During the event, guest speaker Elaine Forrest of PwC offered insight into the broader reporting landscape, while Friend’s Vicki Wright, Clive Bidwell and Nick White ran through the key stats which emerged from our annual research and explained how FTSE 100 reporters performed against our four best-practice criteria: fairness and balance; forward-looking information; communication and transparency.
Three big takeaways from the event:
1. Sustainability/ESG is the focus for many reporters
In 2023, around a third of the average strategic report is given over to sustainability topics. Both the breadth and depth of information offered by reporters continues to grow at pace, with the average sustainability section page count rising to 23 in 2022/23 – four years ago the average was eight pages.
Many reporters also offer sophisticated TCFD responses and detailed discussion around net-zero goals. TCFD sections increased from an average of five pages in 2021/22 to nine in 2022/23. A significant number are clearly heeding the FRC’s advice to improve their TCFD reporting while supplementing it with SASB measures, in lieu of something like the forthcoming ISSB Standards.
2. Forward-looking information remains the biggest challenge
Many reporters find discussing the future to be one of the trickiest challenges they face. While this has always been a difficult area for preparers, the macro-economic uncertainty created by, among other things, the COVID pandemic, the return of inflation, the end of the low interest rate environment and Russia’s invasion of Ukraine has made it even more difficult to look ahead in the annual report. Of course, investors’ appetite for this content remains undiminished.
We were however very pleased to see that some reporters did buck the trend, and there was also much to showcase and celebrate regarding our other three best-practice criteria – fairness and balance, communication and transparency. During the seminar, we highlighted the reports that stood out this year:
Fairness and balance: Admiral, Fresnillo and Next
Forward-looking information: Fresnillo, InterContinental Hotels Group, United Utilities
Communication: Experian, InterContinental Hotels Group, United Utilities
Transparency: Airtel Africa, Next and Rentokil Initial
3. Print-first thinking is holding some back – another way is possible
Even in this era of fast-diminishing print runs, page counts are clearly a worry for many, with very small type and tight layouts still common. This type of design can make reports very difficult for readers to engage with, and doubtless lead many to abandon the attempt altogether. While print is still mandatory in the UK, there is of nothing stopping preparers from producing something that works best on-screen, with big type and relaxed, editorial-style layouts which appeal to readers.
