Practical perspectives on reporting #13: Striding into ESEF with a song in our hearts
By Tamara O’Brien, TMIL’s roving reporter
Welcome to a new year of Trust me, I’m listed webinar blogs. And what better place to start than the launch of the book’s eagerly-awaited second edition, containing updated chapters on the latest in environmental, social and governance (ESG) reporting, and the future of digital reporting.
For people new to the webinar, Claire stated the principles on which her book, Trust me, I’m listed: Why the annual report matters and how to do it well , and her communications and reporting agency Falcon Windsor, are founded. Namely:
The annual report (AR) is, or should be, the source of truth about a company
The AR is therefore at the heart of the relationship of trust between a company and its stakeholders
But, while few companies would disagree with the above, they often fall at the how to do it well part. And that’s because a forest of regulation, and many other complicating factors in the reporting process, all stand in the way of good, open, human communication.
‘How to do it well’ is what inspires Claire, her book, and the entire Falcon Windsor team.
Getting the show on the road
Our focus today was ESEF, because it’s top of mind for reporting teams as they prepare to deliver their first reports in the new format. The latest regulations require listed companies in Europe, including premium-listed in the UK, with financial years beginning on or after 1 January 2021, to file their ARs digitally, in XHTML, with the financials tagged in XBRL, rather than as a PDF.
The idea is to enhance transparency by making these tagged, suited-and-booted reports machine-readable, and therefore easier to compare with each other. The reality for companies has been… a rocky road, but with a glimpse of sunlit uplands ahead.
A classic tale of triumph over adversity, then. So it was entirely appropriate that our panellist Martin Blaxall, Director, Corporate Brand and Communications at AstraZeneca, should begin proceedings with a song from the Stephen Sondheim musical, Follies. Referencing a long career in telling companies’ stories, Martin identified with the lyrics of the Broadway belter, ‘I’m Still Here’:
‘Good times and bum times, I've seen them all
And, my dear, I'm still here…’
For the purposes of debate, Rob Riche – co-founder of agency Friend Studio in 2012, and stalwart of Radley Yeldar before that – graciously allowed himself to be cast in the role of Defender of Tech, while pointing out that he too is primarily a communicator. He also freely admitted to the pain his own agency felt, in trying to dovetail ESEF with clients’ existing processes. But, in reporting as in showbiz, first-night teething troubles are to be expected.
You say ee-sef, I say essef….
Now, I confess I’m no lover of conversations about technical matters, unless it’s to do with language or grammar. When it comes to software, nah-ah. After grasping concept a, and just about hanging on to concept b, concepts c-j might as well take a flying quantum leap. Nor do I have any personal experience of producing an annual report in the new format.
But luckily, the panel spoke so vividly about ESEF that I really felt the hopes, fears and bumps in the road of their respective journeys. Here’s what I took from the discussion.
Claire: while lauding its comparability aims and data-mining potential, Claire initially hated the idea of ESEF. The idea of reducing a company’s complex and unique story to a series of contextless information tags was self-defeating – obscuring the truth it sought to reveal. She was however mollified and mostly converted, after Rob showed how the technology had massively improved over a couple of years, with developers rising to the challenge of creating a system that can deliver great reporting, both for human readers and machines (in print, pdf and fully interactive formats, including ESEF). The eye-opening demo she witnessed from Friend Studio is now part of a case study interview with Rob in the new edition.
Martin: has lived through decades of annual report regulation, ‘in the hope that annual report Nirvana lies just around the corner’. But every new regulation just seems to result in more boilerplate, more use of the AR as an ever-expanding receptacle of stuff. In the US, where tagging has long been the norm, telling the company story is secondary to efficiency of production. It’s a production nightmare, the emphasis is more on cutting the story to fit rather than telling it fully – and does ESEF really help readers compare reports more easily anyway? Is there still mileage in telling a story well?
Rob: ESEF isn’t perfect but he sees cause for optimism. He admits that when they first looked at it, around 2016, the format was ‘bloody depressing’. Everything good for the reader was sacrificed for marginal gains for the user who just wanted data. But Friend Studio remained convinced of its potential, until a turning point in 2018 when it became possible to convert PDF to HTML. Now they’ve gone beyond PDF conversion to look at the really exciting stuff – the interactive potential of ESEF. HTML means the AR can do anything a website can do – but crucially, with an AR’s audited data, and machine-readability, while remaining a self-contained, lockable format. Still a work in progress, but the end result will be amazing data and amazing communication. Whoop!
Give ’em the old razzle dazzle
As ever, design – the way the words are presented – is crucial to attracting, engaging and supporting the reader, in the often daunting task of reading an AR. For Rob, as a former designer, it was a case of the more formats the merrier. PDFs could be text-dense for printing out; or ‘airy’ (think white space) for impact and pace; or designed as info snippets; or – you get the picture.
Responding to Claire’s concern that long-form copy might find itself elbowed out of this digital maelstrom, Rob gave another stage-based analogy. Entertainment doesn’t suffer because it comes in the form of theatre, cinema, TV or streaming. They all have their place in meeting different audience needs.
Parting thoughts as the curtain falls:
Martin: If you haven’t started planning yet…start now! The cross-functional nature of the AR process needs everyone to make sure tagging works properly.
Rob: Much of the information out there is hellishly confusing. I recommend Friend Studio’s free ESEF webinar about different tools and approaches!
Claire: couldn’t agree more – and don’t forget to sign up for the next webinar, 13th January, with Professor Robert Eccles on the popular subject of ESG.