Non-Financial Statement: what it is and why it's important

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The ESG criteria (Environmental, Social, Governance) are gaining increasing importance in the perception of the value of a company and its business results. The Non-Financial Declaration (DNF) meets this need by providing a clear overview of business strategies to effectively manage environmental, social, and ethical impact issues. The DNF covers fundamental aspects such as health and safety (both public and employee), environmental protection, respect for human rights, and combating corruption. With the evolution of international regulations, the DNF has established itself as a key tool in ensuring corporate transparency, responding not only to new legal obligations but also to the growing expectations of stakeholders, who demand greater responsibility and clarity on business activities.

Non-financial reporting in the EU began with the Directive 2014/95/EU (NFRD), which required large companies to report ESG data. From 2024, the Corporate Sustainability Reporting Directive (CSRD) replaces the NFRD, expanding the obligation to about 50,000 companies, including listed SMEs and non-EU companies with operations in Europe. The aim is to increase transparency and comparability of sustainability information. Recently, the Omnibus package was adopted, an EU measure introducing regulatory changes and clarifications to facilitate the implementation of the CSRD. In particular, it provides a two-year extension for the obligation of reporting by listed SMEs and simplifies certain requirements, thereby reducing the number of companies subject to the CSRD Directive by more than 80% compared to initially expected.

According to the European regulation, the NFI must include detailed information on five fundamental areas:

- Environment: resource management, greenhouse gas emissions, waste, and environmental impacts of business activities.
- Social: health, safety, working conditions, and social impact in the territories where the company operates.
- Personnel management: inclusion policies, gender equality, employee well-being, and child labor prevention.
- Human rights: actions to prevent discrimination and human rights violations.
- Anti-corruption: measures to prevent corruption and promote transparency.

The information provided must comply with internationally recognized standards, such as the Global Reporting Initiative (GRI), the Sustainability Accounting Standards Board (SASB), and the European Sustainability Reporting Standards (ESRS).

With the increasing demands for transparency, the digitalization of non-financial reporting is becoming essential. The CSRD Directive introduces the obligation to use the XBRL electronic format (eXtensible Business Reporting Language) to standardize ESG data and facilitate its analysis. Furthermore, tools based on artificial intelligence and blockchain are emerging to ensure greater precision, traceability, and verifiability of sustainability information. These innovations not only simplify the reporting process but also improve the comparability of data between companies and sectors.

With the introduction of the Corporate Sustainability Reporting Directive (CSRD), non-financial reporting will undergo a significant evolution. Companies will need to provide more detailed and verifiable data, with an increasing integration of the non-financial statement into the financial statement. The CSRD emphasizes the concept of double materiality, asking companies to report both on the impacts of their activities on the environment and society, and on how external factors affect their economic performance. This change leads to a more transparent market, where investment decisions are based not only on financial outcomes, but also on social and environmental impacts.

This article was created as part of the "Biodiversity services EU expansion" project (CUP: E43D22000480009) under the Lombardy Region call "PR FESR 2021-2027 – LINEA INTERNAZIONALIZZAZIONE 21-27", aimed at supporting the internationalization of Italian companies. 3Bee is the naturetech company that develops innovative technologies for monitoring, protecting, and regenerating biodiversity, supporting companies in defining customized climate strategies based on the analysis of their impacts and dependencies on nature. With a consolidated portfolio in Italy, Germany, and France and significant partnerships, 3Bee continues its expansion in international markets to create a concrete impact through technology.