Spot on… “Integrate the traditional financial audit opinion with the recently introduced sustainability reporting.”
Martin Hoogendoorn, Professor of External Reporting at Erasmus University Rotterdam, argued this in his farewell lecture. Edwin van der Schoot also highlighted this in an article in Het Financieele Dagblad.
Professor Hoogendoorn’s call strongly resonates with us and is exactly why we started Salacia Solutions five years ago. Up-to-date and accurate insight into non-financial (sustainability) data is a hard reality for companies.
Sustainability reporting is strategic information that drives long-term value creation. The title Chief Value Officer is therefore very well chosen.
The strategic value of non-financial data is evident from:
- Access to finance
Banks and investors continue to request non-financial information. Not only can companies benefit from lower interest rates, but sustainable products are also growing faster than non-sustainable ones. Investors want to understand this. - Risks & opportunities
Climate risks have certainly not disappeared. Do you know what risks your company faces? Visibility into vulnerabilities in supply chains is highly relevant. Product innovation requires a new perspective on data and performance. How easily can you access this information? - Stakeholders
Failing to report on sustainability—or doing so inaccurately—directly leads to reputational damage. Local communities are asking tougher questions. And if you want to remain attractive to new employees, transparency is essential. Customers are also becoming more demanding, for example regarding the use of raw materials. How effectively are you informing your stakeholders? - Compliance
Regulation is, of course, a driving force. But we also see more and more companies voluntarily adopting certain standards. The B Corp community is growing rapidly, and B Corps prefer to do business with other B Corps. Are you part of such a community or not?
Unlocking the value of non-financial data is like learning a new language. As Professor Hoogendoorn rightly points out, financial reporting has been around for decades – we know that language.
Sustainability reporting is relatively new, and companies face the challenge of becoming more fluent in it. The good news: the more fluent you become, the more value it delivers.
The real challenge is to make non-financial information just as easily accessible as financial information. The annual report is an important document prepared once a year – but no company looks at financial data only once a year. Truly steering on value creation requires continuous adjustment based on current and accurate insights.
So we not only need to learn a new language – we need to start using it every single day.
