The term ‘non-financial reporting’ has never garnered many supporters, but in the absence of a better alternative it has endured the test of time, at least for now. Of all the prefixes that could have been chosen to characterise ESG information with financial relevance (i.e. material), ‘non-’ is the most nihilist option, which leads to a contradiction in terms. In fact, when RI conducted a survey of the most hated phrases in responsible investment last year, ‘non-financial’ came in second place.
The European Commission adopted it when in 2012 it started to amend EU laws on financial statements and corporate reporting, resulting in the now key piece of legislation for sustainable finance: the 2014 Non-financial Reporting Directive (NFRD).
For background read: A new dawn for mandatory ESG reporting: how it came about … and what to expect next
Other possibilities were not considered any better: from 'non-accounting’ and ‘extended’ to ‘pre-' …