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This article was first published in the November/December 2017 UK edition of Accounting and Business magazine.

There is a brave new world ahead. Yet there are many people applauding and few actually thinking that they should be the ones up at the sharp end and running it.

Such is the dilemma faced by enthusiasts for the idea of non-financial information taking a central position in corporate reporting.

No one really disputes it any more. It has won the day. That is very different, however, from actually regulating and promulgating it through some global framework. After all, the history of the gradual acceptance of non-financial information at the top table is one of the loose concepts allowing innovation to flourish without the heavy hand of institutional bodies on their shoulders.

At a recent Accountancy Europe event, and with its call to ‘enhance the co-ordination of non-financial information initiatives and frameworks’, all this came out in the open – and not before time. The pressures are inexorable. Recent figures showed that in the top quartile of FTSE 100 companies, 46% of shareholder value was made up of intangibles, for example. And Hans Hoogervorst, chairman of the International Accounting Standards Board, makes much of the tale of Tesla, the pioneer of futuristic cars.

As Hoogervorst says, the company has gone through $7bn in cash, diluted its investors’ shareholdings, and seen its market value reach $50bn. This is a higher value than that of General Motors, even though it sells a hundred times as many cars as Tesla – and does it profitably.

This is why the world of non-financial information is so important. It is driving investment decisions.

But no one body is driving the credibility and integrity of that information. It is clear from most of the bodies involved that no one really wants to yet. There is a call for global regulation, says one veteran observer of the scene, but nobody is up for that.Hoogervorst, never known for wild ideas, describes it as ‘a rocky road’.

The problem may well be a simple one. The evolution of the concept over the past decade or so has been gradual and has made much of not being forced or regulated in any one particular direction. This, after all, is how integrated reporting grew out of an initial working group on accounting for sustainability. It may be that out of the International Integrated Reporting Council (IIRC), the answer emerges. Through its corporate reporting dialogue, a valuable liaison role could be built.

Inherent contradictions

Yet inherent contradictions remain. It sees the main user of the information as being the shareholder. The powerful international body, the Global Reporting Initiative, sees the users as all being stakeholders. But the IIRC may be the one body inclined to grasp the role. Equally, the much-respected Financial Reporting Lab, under the aegis of the UK’s Financial Reporting Council, could be taken up and used as an agent for change.

The bits of the jigsaw are moving into place. From the UK’s concept of the strategic report, to the EU’s Non-Financial Reporting Directive, to the European Securities and Markets Authority’s guidance on non-financial information, European bodies sense change. It is a far cry from the legalistic US culture. The conversation there is still very much tied to regulation.

Whatever happens, we are seeing a cultural revolution. Almost all the European groupings are embracing the ideas and putting them into place.

It is still accepted that there should be convergence in the field of non-financial information; equally it is accepted that experimentation is needed. That is inherently contradictory. But often the best and most robust solutions emerge from contradictions.

Robert Bruce is an accountancy commentator and journalist