September 17, 2020
As many companies head into planning meetings for next year, now is an excellent time to challenge your annual reporting strategy. 2020 has been an unprecedented year. How we choose to reflect on this time and what priorities look like going forward will certainly be different – especially with increasing pressure from investors and other stakeholders to report on non-financial metrics such as environmental, social and governance (ESG) topics and “stakeholder capitalism” moving closer to the mainstream. In particular, social topics have come to the fore due to the COVID-19 pandemic, economic crisis and social justice movement.
As you consider how to report on 2020 performance, reviewing examples from best-in-class reporters can help provide guidance and inspiration. I recently had the opportunity to participate on a panel of judges for the Annual Report on Annual Reports, an independent global survey on annual reporting practices. As part of this survey, 1,000 annual reports, including a number of integrated reports, were reviewed and the top 350 reports were rated according to five criteria: communication & style; operations & sustainability; strategy & leadership; figures & financials; and investors & governance. These evaluation criteria are based on a balanced perspective, blending financial and operational results, short-and longer-term goals, strategy and operations, key stakeholder priorities, graphic design and visual elements, and communication style.
Three of our favorite reports from the survey are:
SCA – This report, by Europe’s largest forest owner, was voted the overall winner of the group and rightfully so, as it is thoughtful, strategic and presents information in an engaging way. We were impressed with the detailed and balanced discussions of strategy and sustainability. The discussion of how SCA’s product fits into and supports the overall global megatrend of sustainability is an especially interesting piece of the company’s value proposition. We also appreciated the use of graphic elements to help simplify the company story.
AstraZeneca – We always love a good theme! The report’s thematic approach around science and “next” helped to weave the biopharmaceutical company’s story together across business, strategy and sustainability discussions. In addition, we liked the personal commentary from the Chairman, CEO and CFO – each providing unique perspective on company strategy, progress and performance.
Novozymes – We respect the approach taken in this report, particularly the tone of the narrative and the CEO letter, given it was a down year for the biological solutions company. The messaging was straightforward and honest with the company “owning” 2019 results and purposefully turning the focus to the rollout of a new strategy to help drive improvements in the future. Also, being new to the business, we appreciated the overviews of each area of the business, trends that impact performance and how Novozymes products impact everyday lives.