Nearly all finance leaders globally (96%) are concerned about the integrity and reliability of nonfinancial data, according to EY’s 2024 Global Corporate Reporting Survey.
With over 2,000 finance leaders and 815 institutional investors surveyed, the report highlighted a crisis of confidence in corporate reporting. Nonfinancial data, which includes environmental and social metrics, has become essential for stakeholders, yet many finance leaders worry it falls short of supporting informed decision-making.
Among the survey’s findings, discrepancies in data formats and inconsistencies in nonfinancial disclosures emerged as key issues, with 39% of leaders citing format problems and 35% noting inconsistencies. This lack of uniformity could impact organisations’ ability to reach global sustainability goals, as only 47% of finance leaders and 53% of investors believe that most companies are on track to meet their stated sustainability targets.
The survey also revealed that investor scrutiny of nonfinancial performance is growing more intense, with 69% of finance leaders reporting a rise in investor queries about these issues over the past two years. However, concerns around greenwashing exist: 55% of finance leaders fear that inadequate data and due diligence could lead to accusations of misleading sustainability claims, potentially damaging corporate reputations.
When human expertise meets machine-learning
Artificial intelligence (AI) offers a potential solution, according to the findings, with 57% of investors believing that AI could enhance the credibility and accuracy of corporate disclosures, enabling better detection of inconsistencies. AI’s ability to streamline data validation could help finance teams navigate the challenges of nonfinancial reporting, adding an essential layer of reliability to critical metrics.
While new regulations could improve reporting standards—78% of finance leaders said agree they would have a positive impact—implementing these changes will not be straightforward. Over half (55%) of finance leaders anticipate that compliance costs will be high, and 44% worry about the complexity of meeting new requirements.
Nicolas Lecoq, EY Global Financial Accounting Advisory Services Leader, said: “Finance leaders’ apprehension around businesses’ ability to meet crucial goals underscores the growing importance of building confidence in reporting on sustainability efforts. Customers, shareholders, regulators and investors increasingly hold companies to account for their environmental impact and commitment to sustainable practices. This means that the integrity of corporate reporting is now more critical than ever – it reflects an organization’s dedication to sustainability goals and can directly impact the trust that investors, and the wider public, are willing to invest in it.
