Question

Do some research on integrated reporting or non-financial reporting and answer the following (with citations and sources):

1. If you were considering investing in a company, what non-financial information related to the company would you want to learn about? Why?
2. If you were a majority shareholder in a company, would you be willing to spend a considerable amount of money (which could otherwise be productively invested) to track and report non-financial information? Why?

Answer 1

A. The following non financial information can be taken into consideration while investing in a company

1. Corporate Social Responsibility -

(a) Company's interest & responsibility w.r.t the environmental factors(Reduction of activities leading to environmental damage, Ensuring eco-friendly business going activities, Initiatives aiming at reducing pollution and greenhouse gas emissions and the sustainable use of natural resources)

(b) Company's interest & responsibility w.r.t the human resource (Satisfying business needs in alignment with labor needs, improvement in labor policies like fair trade practices and disavowing child labor,enhancement of employment oppurtunities etc)

(c) Company's policy with regard to Ethical functioning of the business (Complaince of norms/regulations applicable)

(d) Company's philantrophic responsibility (Involving in Charity activities,Donations, assisting poverty line population,funding educational programs, supporting health initiatives etc)

(e) Economic responsibility initiatives involving improving the firm’s business operation while participating in sustainable practices (Using a new manufacturing process to minimize wastage, Technological advancement)

2. Compliance of all norms promptly and timely as prescribed by respective Acts and Board(In case of listed companies - Compliance with SEBI norms)

3. Company's relation with its stakeholders like suppliers, employees, government, shareholders etc

4. Company's internal policies like Grievancal policies, Union resolution policy etc

5. Company's responsibility in complying with the Legal aspects of the business etc

B. Being a majority shareholder, it is worth spending a considerable amount of money in tracking & reporting non-financial information because it aims at Long-term results to the company, resulting in sustainability of the company in long run.

As there is much involvement of shareholder's interest in the company, one should consider non-financial information along with the financial perception because both are interdependent to ensure a prospective business aiming at beneficial returns.