NFIS: How to create a Non-Financial Information Statement

The Non-Financial Information Statement (NFIS) represents a milestone in the current corporate landscape, symbolising a compromise with sustainability and corporate social responsibility.

This document reflects how companies are going beyond financial results to evaluate their environmental and social impacts, promoting transparency, and strengthening confidence with stakeholders.

Throughout this article, we will explore in depth what is a NFIS, who should be reporting it and the best practices in order to do so, providing an essential guide to navigate the ecosystem of non-financial information.

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What is NFIS and its Relevance within Corporate Responsibility?

A Non-Financial Information Statement is a report that companies use to communicate their performance and strategies in areas outside of finance, like the environmental, social and governance framework.

It’s a key part of corporate responsibility, as it offers an integral insight into an organisation, going beyond economic results, reflecting their impact and commitment to sustainability and the principles of responsible action.

The relevance transcends mere legal compliance, it has become a factor of differentiation and a declaration of the ethics and values of a company.

Obligations and Reach of the NFIS

The reach and obligations of non-financial information statements (NFIS) in Europe are governed primarily by 2014/95/EU Directive, which establishes the basis for the presentation of non-financial information on the part of large companies. See below an overview adapted to the European context, based on collected information:

Who is obligated to present NFIS?

Obligations to present NFIS apply to large companies that are classified as public interest entities, with certain characteristics:

Number of Employees: Companies that exceed, on average, 500 employees on their balance sheet dates are required to publish a NFIS.
Public Interest Entities: Referring to entities of public interest, like listed companies, banks, and insurance companies.
Balance Sheet and Turnover: Furthermore, public interest entities require a total balance exceeding €20,000,000 or turnover in excess of €40,000,000.

Once compliant with these requirements Non-Financial Information Statements become obligatory.

Conditions and requirements for the presentation of NFIS

The NFIS must provide a clear understanding of a diverse set of non-financial aspects of a company.

Topics to be Reported: Environmental, social and those relating to employment, with respect to Human Rights and the fight against corruption and bribery.
Transparency: The Directive looks to promote transparency and the surrender of accounts in corporate operations, permitting stakeholders to better understand the position and performance of a company in non-financial areas.
When is NFIS presented? The NFIS must be generated within three months of the exercise end date. It must be presented as a separate point during the agenda for approval from the entity’s general shareholder meeting. The internal processing for the NFIS is similar to that of a historic measure for the company.
Who signs the NFIS? The entity’s administrators are in charge of writing the NFIS and must sign them prior to presentation. Furthermore, the NFIS must be verified by an independent expert, for example an accounts auditor.

Specific regulations can vary between different EU member countries, but all align with the basic established requirements of the 2014/95/EU Directive.

To obtain a complete and precise understanding, it’s recommended to review local legislation and guides provided by national regulatory or relevant European authorities.

Fundamental components of the Non-Financial Information Statement

NFIS has become a crucial tool for European organisations, allowing transparent communication of impacts and performance in areas beyond finance. These are some of the fundamental components of the NFIS:

Key Aspects Required within an NFIS

If you’ve asked yourself what an NFIS must contain, here we’ve left you a summary of the key aspects:

Environmental Information: Evaluation of the environmental impact of a company, including greenhouse gas emissions, waste management, natural resource and energy usage, and actions taken to mitigate negative impacts.
Employment and Social Information: Details regarding the management of worker relationships, health and job security, training, equality of gender and diversity, and the wellbeing of employees.
Respect for Human Rights: Actions to guarantee respect for human rights throughout all operations, including the supply chain.
Fight against corruption and bribery: Measures adopted to prevent, detect, and tackle corruption and bribery.
Information regarding Corporate Governance: Details on governance, political and procedural structure, and how corporate social responsibility is integrated in the strategy and operations of a company.

NFIS Report: More than a statement, a declaration of intentions

NFIS go beyond a simple annual statement or report. Upon presenting the NFIS, companies are not only complying with regulations, but also:

Demonstrating Transparency: Showing a proactive transparency towards stakeholders, providing a clear vision on how the company manages non-financial impacts.
Creating Trust: Establishing a base of trust with stakeholders, including investors, employees, clients and the general community.
Promoting Sustainability: Highlighting the commitment of a company with sustainability, showing how responsible practices are integrated within their strategy or daily operations.
Facilitating informed decision making: Promoting valuable information that can help stakeholders make informed decisions with respect to the company.
Promote Continuous Improvement: Helping the company to identify areas for improvement and promote a culture of continuous improvement in relation to sustainability and social responsibility.

NFIS has become a tangible manifestation of a company’s commitment to responsible and sustainable performance, helping construct a solid and positive relationship with its stakeholders alongside society in general.

8 essential tips to prepare your Non-Financial Information Statement

1. Save all the evidence

It’s important to archive all documents you use to report your NFIS’ information, including calculations that you’ve made and problems that you’ve encountered in the process.

2. Train employees in non-financial reporting

Regardless of whether or not they’re involved directly in this activity, it’s fundamental that employees are aware of the need and implications of the report, in such a way that when the time to prepare the report arrives, they understand why it’s necessary to complete the exercise with transparency.

3. Good Time Management

Plan the report preparation process well, as proper time management will prevent you from having to delay deadlines or being forced to sprint during the last few days before the deadline for submission.

4. Look for data comparability

Make sure that the information and data you are including in the report are comparable not only with your own company, but also with those of other companies.

5. Make clear the scope of the information and omissions

To create comparability, it’s important to include page footers and descriptions regarding the scope of information included, and even include any data points that haven’t been considered in the preparation of the report.

6. Choose a clear structure

Organise your report in a way that the displayed information follows a logical order and is easily legible, with the aim of facilitating information search and the understanding of the content by the reader.

7. Include sustainability risks

Remember that when you describe risks to which your company may be exposed, you should not only focus on traditional risks, but also include those relevant to sustainability.

8. References to public documents, easily located and accessed.

When you reference documents, it’s important that that these are publicly accessible from the corporate web page or some other web page where they can be consulted, whose links should be included in the document.

Putting Sustainability on Track

The path towards sustainable and responsible corporate management can appear challenging, but with adequate planning and precise tools, it’s attainable.

The production and presentation of the NFIS is a crucial task that reflects the commitment of a company to sustainability. Adequate tools can simplify this process, providing valuable insights for efficient management.

At APLANET, we provide a software that facilitates the compilation and analysis of relevant ESG data that will help you in the NFIS creation process. You can find out more here.

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