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Wednesday, October 30, 2024

g-f(2)3138 Sustainability, Transparency, and AI: A Leadership Guide from the EY Global Corporate Reporting Survey

 


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genioux Fact post by Fernando Machuca and ChatGPT


Executive Guide for Leaders: Golden Knowledge from the "2024 EY Global Corporate Reporting Survey"


Introduction


The 2024 EY Global Corporate Reporting Survey offers a critical analysis of the evolving role of finance leaders in addressing the challenges and opportunities of corporate reporting in a dynamic global environment. This guide distills the report's key insights into actionable strategies, emphasizing the transformative power of sustainability, transparency, and technological innovation in creating long-term value. Leaders are called to adapt and excel in an era marked by heightened investor expectations, regulatory scrutiny, and AI-driven transformation.



genioux GK Nugget


"In the "Age of And," CFOs must simultaneously manage short-term performance pressures and drive long-term value creation, with sustainability and transparency at the core of their strategies." — Fernando and ChatGPT, October 30, 2024



genioux Foundational Fact


The survey highlights a growing demand for enhanced corporate reporting that balances financial and nonfinancial metrics. CFOs are critical in integrating sustainability, harnessing advanced analytics, and ensuring transparency to meet investor expectations and regulatory requirements. The role of finance is expanding to shape narratives that build trust, drive innovation, and navigate the complexities of modern corporate governance.



The 10 Most Relevant genioux Facts


  1. Sustainability Drives Value Creation: 69% of finance leaders report increased investor focus on nonfinancial value drivers, emphasizing sustainability as a core component of long-term strategy.
  2. Greenwashing Risks Undermine Credibility: Over 55% of finance leaders acknowledge that sustainability reporting risks being perceived as greenwashing, highlighting the need for transparent and verifiable disclosures.
  3. AI as a Game-Changer: 57% of investors see AI tools as vital for assessing the accuracy of corporate disclosures, underscoring the transformative potential of AI in finance analytics.
  4. Data Challenges Persist: 96% of finance leaders encounter issues with nonfinancial data, ranging from inconsistencies to varying formats, which impede reporting accuracy and decision-making.
  5. New Reporting Standards Boost Confidence: 78% of investors believe new sustainability reporting standards will enhance accuracy and comparability, driving better investment decisions.
  6. Balancing Short-Term and Long-Term Goals: 80% of investors feel executive teams prioritize short-term profits over long-term commitments, urging CFOs to act as strategic counterweights.
  7. ESG Controller Role Emerges: 58% of companies are planning to establish dedicated ESG controller roles to improve sustainability disclosures and integrate nonfinancial metrics into corporate strategy.
  8. Building Stronger Technology Foundations: Only 32% of finance leaders report having high-grade technology for data management, signaling a critical need for investment in digital infrastructure.
  9. Human-Centered Transformation: Engaging younger team members in transformation initiatives correlates with higher AI maturity, demonstrating the value of diverse perspectives in innovation.
  10. Responsible AI Frameworks: Effective AI use requires frameworks addressing accountability, transparency, fairness, and ethical considerations, ensuring alignment with organizational values.



Strategic Recommendations for Leaders


  1. Elevate Sustainability Reporting: Integrate sustainability into decision-making and resource allocation, ensuring disclosures are both credible and actionable.
  2. Harness the Power of AI: Leverage AI tools to enhance analytics capabilities, streamline reporting processes, and provide actionable insights.
  3. Strengthen Data Integrity: Invest in robust data management systems to address inconsistencies and support accurate reporting.
  4. Promote Long-Term Thinking: Advocate for balanced capital allocation strategies that align short-term performance with long-term value creation.
  5. Prepare for Regulatory Changes: Monitor global reporting standards and proactively adapt to ensure compliance and maintain competitiveness.
  6. Develop ESG Expertise: Establish dedicated roles like ESG controllers to oversee sustainability initiatives and strengthen nonfinancial reporting.
  7. Foster Cultural Change: Build a culture of innovation and collaboration within finance teams to support transformation efforts.
  8. Upskill the Workforce: Implement targeted training programs to develop analytics and digital skills among finance professionals.
  9. Adopt Co-Sourcing Models: Collaborate with external partners to meet specialized skills demands, especially in sustainability and AI analytics.
  10. Implement Responsible AI: Develop and adhere to ethical AI frameworks that ensure transparency, fairness, and reliability.



Conclusion


The 2024 EY Global Corporate Reporting Survey presents a roadmap for CFOs and finance leaders to navigate the complex landscape of modern corporate reporting. By prioritizing sustainability, leveraging AI, and fostering transparency, leaders can build trust, drive innovation, and position their organizations for long-term success. In the "Age of And," adaptability, collaboration, and strategic foresight are indispensable for thriving in an era of rapid change and heightened expectations.





REFERENCES

The g-f GK Context


Myles Corson and Nicolas Lecoq, 2024 EY Global Corporate Reporting Survey, EY, Survey, October 23, 2024.



ABOUT THE AUTHORS


Myles Corson

EY Global and Americas Strategy and Markets Leader, Financial Accounting Advisory Services

Supporter of finance leaders and functions of today and tomorrow. Global citizen. Podcast host. Curious mind. Father of two energetic boys.


Nicolas Lecoq

EY Global Financial Accounting Advisory Services Leader

Trusted business advisor. Global citizen. Loving husband and father. Sports enthusiast.


EY Contributors:

  • Dr. Matthew Bell: EY Global Climate Change and Sustainability Services Leader.
  • Helene Siberg Wendin: EY Global Financial Accounting and Advisory Services Deputy Leader.
  • Dr. Velislava Ivanova: EY Global Strategy and Markets Leader, Climate Change & Sustainability Services.
  • Jolanda Dolente: EY Global and EY EMEIA Enhanced Corporate Reporting and Accounting Leader.
  • John K. Thompson: EY Global Head of AI.


Interviewees:

The survey features insights from prominent finance leaders, including:


  • P. B. Balaji, Group CFO, Tata Motors.
  • Thomas Bohun, Head of Group Reporting & Investor Relations, Swiss Re.
  • Kristina Fanjoy, CFO, Canada Pension Plan (CPP) Investments.
  • Stephanie Fielding, Director of Sustainable Finance and Tax, Bupa.
  • Jon Hocking, Head of Investor Relations & Rating Agency Management, Zurich Insurance Group.
  • Dalton Smart, Senior Vice President Finance, Global Controller, Merck.



Classical Summary of the "2024 EY Global Corporate Reporting Survey"


The "2024 EY Global Corporate Reporting Survey" examines the evolving responsibilities of CFOs and finance leaders as they navigate the complexities of corporate reporting in a dynamic global environment. Based on insights from over 2,000 finance leaders and 815 institutional investors, the report explores how finance teams are addressing the increasing demands for sustainability, transparency, and technological innovation.


The report identifies three key priorities for finance leaders:


  1. Creating Sustained Value in a Changing World: CFOs are tasked with balancing short-term performance pressures with long-term value creation. This includes integrating nonfinancial metrics, such as sustainability, into corporate strategy and reporting to meet heightened investor expectations. However, challenges such as greenwashing risks and data inconsistencies undermine confidence in sustainability disclosures.
  2. Cutting the Reporting Confidence Deficit: The survey highlights concerns about the credibility of nonfinancial reporting. Over half of finance leaders believe their industry’s sustainability reporting risks being perceived as greenwashing. The report calls for greater rigor in data management, the establishment of roles like ESG controllers, and alignment with evolving global regulatory standards to enhance trust and comparability.
  3. Transforming Finance Analytics in the AI Era: AI is transforming corporate reporting, offering tools for real-time data analysis, decision-making, and enhanced transparency. While enthusiasm for AI adoption is growing, the report underscores the need for robust data foundations, responsible AI frameworks, and a human-centered approach to integrating technology into finance operations.


The survey underscores the "Age of And," where finance leaders must simultaneously address multiple priorities: delivering near-term results while advancing long-term strategies, particularly in sustainability and digital transformation. By fostering cultural change, upskilling teams, and embracing innovation, finance leaders can drive trust, optimize performance, and position their organizations for success in an increasingly complex landscape.



Classical Summary of the Methodology for the "2024 EY Global Corporate Reporting Survey"


The "2024 EY Global Corporate Reporting Survey" was conducted between March and May 2024 by FT Longitude on behalf of EY. The research involved a comprehensive survey of 2,000 senior finance leaders from corporate issuers and 815 institutional investors, offering a balanced perspective from both preparers and users of corporate reporting.


Key Details of the Methodology:

  1. Participant Profiles:
    • Among finance leaders, 50% were CFOs (23% Group CFOs) and 35% were financial controllers.
    • The survey covered participants from 30 countries, spanning North America, Europe, Asia-Pacific, the Middle East, and South Africa.
    • Respondents represented 14 sectors, with 32% of participating companies reporting annual revenues exceeding US$10 billion.
    • Institutional investors included 28% chief investment officers, representing firms from 22 countries with diverse sectors such as banking, insurance, and asset management. Approximately 20% of these firms managed assets exceeding US$50 billion.
  2. Research Focus:
    • The survey aimed to explore areas of convergence and disconnect between corporate finance leaders and institutional investors on critical topics such as sustainability, transparency, and the integration of technology in reporting.
    • The research sought to identify best practices, emerging trends, and critical challenges in corporate reporting.
  3. Supplementary Insights:
    • In addition to survey data, the research incorporated interviews with key finance leaders and investment decision-makers to provide qualitative depth.
    • Contributions from EY subject matter professionals added contextual expertise, enriching the findings with actionable insights.


The methodology ensured a global and multi-dimensional perspective, combining quantitative data with qualitative expertise to address the challenges and opportunities in modern corporate reporting. By leveraging a robust research framework, the survey provides finance leaders with valuable insights to navigate a rapidly evolving reporting landscape.





Myles Corson


Myles Corson is the EY Global and Americas Strategy and Markets Leader for Financial Accounting Advisory Services (FAAS). In this role, he collaborates with senior management and board-level executives of major Fortune and Financial Times Stock Exchange companies across various industries, with a particular focus on diversified industrial products.


With extensive international experience spanning the US, UK, Europe, and Asia Pacific, Myles has managed networks of global relationships and led complex cross-border projects. His expertise lies in addressing the impact of regulatory and transformational change on the finance function, including accounting and financial reporting, as well as related systems and processes.


Myles hosts the EY Better Finance Podcast, serves on the steering committee for EY’s Global CFO program, and contributes to the organization’s DNA of the CFO research. He earned a bachelor’s degree in Economics from the University of Nottingham and attended Stanford University’s Emerging CFO program.


In his personal life, Myles is a father of two energetic boys and is known for his curiosity and support of finance leaders and functions of today and tomorrow.



Nicolas Lecoq 


Nicolas Lecoq serves as the EY Global Financial Accounting Advisory Services Leader. He is a Global Client Service Partner at EY LLP in the United States, collaborating with large multinational corporations. With over 25 years of experience within the EY organization, Nicolas has developed extensive international expertise across the U.S., Europe, and Africa. 


Throughout his career, Nicolas has assisted senior executives and board members in addressing finance function challenges arising from transactions, significant organizational changes, and growth initiatives. He is a Certified Public Accountant (CPA) and a member of the American Institute of CPAs (AICPA). Nicolas graduated from Neoma Business School in 1996. 


Nicolas emphasizes the importance of technology, innovation, and maintaining a strong organizational culture and values in his leadership role. He focuses on helping clients navigate change and complexities by engaging deeply with senior executives and board members to provide relevant insights and bring the best of the EY organization to his clients. 


Beyond his professional endeavors, Nicolas is recognized as a trusted business advisor, global citizen, loving husband and father, and sports enthusiast. 



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Categorization


This genioux Fact post is classified as Bombshell Knowledge which means: The game-changer that reshapes your perspective, leaving you exclaiming, "Wow, I had no idea!"



Type: Bombshell Knowledge, Free Speech



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REFERENCES



“genioux facts”: The online program on "MASTERING THE BIG PICTURE OF THE DIGITAL AGE”, g-f(2)3138, Fernando Machuca and ChatGPT, October 30, 2024, Genioux.com Corporation.


The genioux facts program has established a robust foundation of over 3137 Big Picture of the Digital Age posts [g-f(2)1 - g-f(2)3137].



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