Trends in corporate reporting

In recent years, many companies - whether listed or not - have partially or completely dispensed with image communication in their annual reports to varying degrees. A clear trend - even among the big players: For the 2022 financial year, only 17 out of 40 DAX companies still published an image section in some form. This is shown by our current DAX 40 trend monitor.

Well-known names such as Allianz, Deutsche Bank and Siemens are among those refusing to do so. And it goes even further: in extreme cases, companies have even exported the annual report documents directly from disclosure management systems. In the simplest layout and almost as an imposition for the reader according to the motto: Nobody reads it anyway, the main thing is that it's finished.

Could it be that this behaviour set a precedent among publishers and was also largely accepted by stakeholders because stock market prices practically only knew one direction at the time: upwards? There was no need to convince people of your own company, tell the equity story or illustrate the corporate strategy with storytelling: The share was doing well anyway.

Something is happening on the stock markets

But now times have changed: The interest rate turnaround made its grand entrance in May 2022 and is likely to stay for a while - poison for the stock markets. In addition, there are international crises such as the war in Ukraine, global political tensions, climate change, which can be experienced on a daily basis, and high inflation rates. None of this makes it easier for the stock market. So is it time to invest more in the layout and content of annual reports again?

Providing answers with storytelling

For us, the matter is clear: nothing speaks against the use of disclosure management systems to cope with increasing complexity - but accompanied by good image output, such as that published by BMW, Continental or Porsche in connection with their 2022 annual reports. Image content remains important and has an impact, but it no longer necessarily has its place in the report. Instead, it seeks and finds new places in separate online magazines, in the corporate blog or in the newsroom.

Sustainability report on new paths

The EU's Corporate Sustainability Reporting Directive (CSRD) , which is to be gradually implemented from the 2024 reporting year onwards, also prescribes a similar path for the sustainability report. Previously usually a neat separate medium with an elaborate image section bursting with large-format images, interviews and reports, in future it will have to be more modest in its reproduction of the new European Sustainability Reporting Standards (ESRS), which is mandatory for all companies subject to reporting requirements:

• The sustainability report will become a chapter of the management report, fundamentally changing its character.
• It will be subject to audit.
• It must be published electronically in the European Single Electronic (ESEF) format.
• This means that the designed, beautifully prepared and story-driven medium will tend to become a sober, number-based, audited and machine-readable report that offers little or no entertainment potential.