Organisations increasingly recognise the significance and value of non-financial data in improving performance and strategic decision-making.
Whilst not directly reflecting monetary transactions, non-financial data — from employee satisfaction and customer loyalty to carbon emissions reduction and waste management — is critical for understanding a company’s overall health, performance, and resilience.
Many companies have reported non-financial performance to assess their operations for years, but now the landscape has become more complex and demanding.
According to Zhongnan Xiang, Assistant Professor in the Accounting Group at Warwick Business School, metrics regarding carbon emissions or environmental disclosures might not seem directly tied to business performance at first glance, ‘but they are becoming regulatory requirements with significant implications,’ she said.
Ultimately, such commitments are changing the profession and marking a departure from traditional reporting, which is focused only on financial outcomes.
In this episode of the Reshaping Finance podcast, Zhongnan Xiang is joined by Hendrik Vollmer, Associate Professor (Reader) and Head of Group (Accounting) at Warwick Business School; and Phillip Pearce, Head of Sustainability at Asta UK.
The expert panel shares key insights on how non-financial data is changing the role of accounting and finance professionals and strategies to leverage non-financial data to build long-term value and create competitive advantage.
Skills needed to report on financial and non-financial data
Accounting and finance professionals must become more data and analytically driven because that ability will be essential for effectively integrating financial and non-financial data into reports.
‘Professionals may need to develop skills that go beyond traditional financial reporting and into the realm of data analytics, risk assessment, and strategic decision-making,’ Xiang said. For example, an important and practical skill is handling structured and unstructured data.
Structured data, like financial transactions or standard financial reports, has always been a core part of accounting. According to Xiang, however, unstructured data, such as climate models or satellite images, should be used to generate more meaningful financial reports regarding sustainability metrics.
With integrated reporting gaining increasing importance, accounting and finance professionals must merge non-financial data with traditional financial metrics to provide a more holistic view of business performance.
‘There’s now a regulatory need for investment portfolios to be analysed, assessed, and managed using financial and non-financial data. We need the capabilities to properly identify, access, and analyse that data, aligning it with the investment strategy and, ultimately, our goals,’ Pearce said.
For example, when a firm invests in resources to promote energy efficiency, accountants and finance teams should quantify the financial benefits — cost savings, tax credits, or reduced harm to the environment — and communicate this impact effectively to investors.
Long-term value and a competitive advantage
Organisations that effectively leverage non-financial data can identify and use these unique attributes, enabling more thoughtful decision-making and positioning themselves favourably in the market.
Accounting and finance professionals are key in supporting organisations in interpreting and acting on non-financial data.
According to Vollmer, finance professionals act as ‘information specialists’ who translate complex data into strategic insight.
‘The role of the accounting professional can be to translate many different types of information into a language that the decision maker would understand,’ he said.
As Pearce noted, the regulatory landscape is a key driver for investment in non-financial reporting, pushing organisations to rethink their strategies.
Integrating non-financial data isn't purely a compliance issue but also a strategic opportunity. Adopting non-financial data can lead to more sustainable practices and drive long-term competitive advantage.
By using non-financial data, organisations can position themselves for month-on-month or quarterly success, long-term growth, and resilience in global markets.
Listen to the full episode of the Reshaping Finance podcast for more details, including tactics on building a business case for non-financial reporting.
Additional resources from the Future of Finance 2.0 research: