Rivo, a Sphera Company

Rivo, a Sphera Company

Moving to something more than the prevailing system


Source: Rivo, a Sphera Company

Transparency is an economic engine, it points us to a standard in company disclosure where reporting on environmental and social issues has become the norm among the world’s largest companies and is increasingly of interest to companies of all sizes.

This isn’t a new development or merely a remarkable gimmick. What it does is reverse a systemic bias to only report on financial data by encouraging companies to adapt to a system that isn’t of their choosing. If you want to attract investment and compete in this new reality, you need to play by a different set of rules.

The original reason for systemic biases is usually benign. “Most people” argued that attempting to create a uniform set of metrics for things that are inherently qualitative, rather than quantitative, is likely to fail. They said that it will simply create its own problems for investors, where they may have some additional information on a company but find it difficult if not impossible to compare two situations on a like for like basis. This bias in favour of “most people” was ingrained, and often served as a barrier to change, reinforcing the power of the dominant group.

I’m well aware that after numerous accounting scandals and many improvements in financial reporting, financial statements are still not always reliable. Therefore it will be difficult to rely on non-financial information produced by companies if for example a company chooses to hide the bad news. The current clamour around non-financial reporting however is a reminder that we need to actively re-think some of the paradigms about traditional financial statements because they give an incomplete picture of a company’s health.

The time has come to give investors, clients and governments comparable, standardised data on increasingly significant risks and opportunities. Standardising disclosure of safety, security and sustainability information could bring significant financial benefits for shareholders and potential investors - and help strengthen the global economy’s long-term health.

Our aim is to make disclosure more cost-effective for companies and more useful to their owners.

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