Investors want better NFI

Globally, investors have an appetite for using non-financial information (NFI) to make capital allocation decisions but don’t always have the information they need for decision-making processes, according to a PwC and World Business Council for Sustainable Development report.

NFI is information outside of financial statements including environmental, social and governance (ESG) metrics.

The report is the product of a series of roundtables and interviews with more than 50 investors in several countries around the world.

Investors want companies to show how NFI is integrated in their strategic decision-making and are looking for material information to be underpinned by controls and processes on a par with those used for financial information.

Time has shown that companies that understand and manage their NFI performance are more resilient to external pressures and change, a growing body of evidence suggests such companies outperform their peers in longterm shareholder value.

Although some countries are introducing legislation that requires assurance on ESG information, most assurance is voluntary and can vary greatly in scope and level.

In addition to being relevant, investors want to have confidence in the reliability of NFI. There was a general view that, when the information’s assured by an independent third party, they can have more confidence in it.

Jayne Mammatt is director of sustainability and climate change at PwC SA.