To ask Her Majesty's Government, further to the Department for Business, Energy and Industrial Strategy research paper Stakeholder perceptions of non-financial reporting, published in October 2019, (1) why they commissioned PwC to undertake this research; (2) whether the tendering process took account of any financial interest PwC had in non-financial reporting systems relating to that company’s audit services; (3) why the paper does not specify (a) which stakeholders were involved in the research, and (b) how they were selected; (4) what assessment they have made of the relative benefits of UK-led non-financial reporting standards compared to international standards; and (5) what assessment they have made of the difficulty in reaching a consensus on common international standards for non-financial reporting of (a) human rights, and (b) climate change, impacts.
The PWC research was commissioned to inform work on a post-implementation review of non-financial reporting regulations, covering:
a) the 2013 regulations which required all companies, apart from those subject to the small companies’ exemption, to produce strategic reports, and b) the 2016 non-financial reporting regulations which required all large (>500 employees) Public Interest Entities to report on environmental, social and community matters to the extent necessary for an understanding of the company’s development, performance and position, and the impact of their activities.
The research project was put out to tender in line with the Public Procurement Guidelines. BEIS received two bids to carry out the work and PWC was selected as the preferred contractor, based on the quality of the bid including their expertise. The project was managed by a social researcher who agreed all details related to the methodology and its implementation. The focus of the report was on stakeholder and company perceptions of the regulations and their impact in general and did not use, or consider the use of, non-financial reporting systems by PwC or any other company.
For the qualitative interviews, the Department selected stakeholders covering a likely cross section of views, including a range of investor groups and non-profit and professional bodies and they are listed on page 12 of the report. The stakeholder interviews were intended to complement the quantitative survey of over 100 companies, who provided their views on a confidential basis.
Although different reporting frameworks and international standards were not a focus of the 2019 research, the UK Government supports the use of international frameworks or standards for reporting on non-financial issues where this is possible. We have commissioned further research, which will include looking at the role of domestic and international reporting frameworks.