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Survey: Sustainability Gaining Prominence in Annual Reports

A new survey of 160 annual reports has revealed that public companies are emphasizing non-financial reporting, including more information on corporate sustainability reporting. The Annual Report Trends Survey 2005, conducted by the Craib Group of Companies and investor relations consulting firm BarnesMcInerney Inc., found that 36% of North American annual reports surveyed published a separate section on sustainability or corporate responsibility.

"Companies know that to earn the trust of investors today, they need to be more transparent and more accountable than ever before, and we're seeing that come through in their annual reports," said Kenneth Barnes, managing partner at BarnesMcInerney Capital Market Communications. "The printed annual report is still a key document that adds insight into a company's operations, management team, board and prospects, while clearly laying out its strategy for growth."

"Sustainability reporting is increasingly becoming a focal point for more annual reports. Investors know that a company's relationship with the environment, employees, customers, suppliers and communities can affect their ability to deliver long-term shareholder value," said Elaine Wyatt, partner at Craib Strategic Directions.

The survey reviewed 160 annual reports selected at random from the S&P 500 and the S&P/TSX Composite Index, collecting data on 186 different items to identify trends, benchmarks and best practices. This was the second annual survey of public companies' annual reports done by Craib and BarnesMcInerney.

Other findings in the 2005 survey include:
  • 13% have adopted the guidelines on management's discussion and analysis published by the Canadian Institute of Chartered Accountants

  • 56% published graphs in their management's discussion and analysis (MD&A), up from 47% last year

  • 25% published a letter from the chairman of the board

  • 15% had letters from the chief financial officer or other members of the management team

  • 13% of companies -- 24% of Canadian companies and 4% of U.S. firms -- provided a list of corporate goals against which they tracked their annual financial and operating performance.
The results of the survey, including an analysis of trends, benchmarks and best practices, are available at online.

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