Why undertake EER?


Here we set out some of the reasons why you might consider undertaking Extended External Reporting. 

What the research shows

International research suggests that Extended External Reporting can lead to:

External Benefits

Internal Benefits

  • Reduced cost of capital
  • Increased stock liquidity
  • Higher market valuation
  • A longer-term investor base
  • Better performance
  • Improved reputation or brand loyalty
  • Improved clarity on business issues and performance
  • Better business decisions, including capital allocation decisions
  • Improved business risk management
  • Improved employee engagement

You can find research supporting the benefits of EER on the International Integrated Reporting Council's (IIRC) <IR> Academic Database. This database brings together over 200 academic studies on Integrated Reporting and other types of EER.

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To tell your story

Financial statements—on their own—present only part of an entity’s story.

EER provides entities with an opportunity to report a more holistic view of the organisation and allows entities to better “tell their story”.

  • EER lets you communicate information beyond what has traditionally been disclosed in financial statements—such as information about your entity’s purpose, business model, strategy and prospects (including any material risks and opportunities).
  • EER can supplement and complement information reported in your financial statements by providing insights into your performance and resources not recognised in the financial statements—such as unrecognised intangible assets.  
  • Financial statements typically focus on historical financial information. EER allows you to communicate forward-looking information about your entity's long-term sustainability. 

Extract from Z Energy 2017 Annual Report [1]

The financial outcomes, however, are just part of the year’s performance. There’s a broader story we want to tell. It’s not a longer story. It’s a more concise and a more relevant story that links back to our business model.

In this year’s annual report, we’ve chosen to adopt the principles of Integrated Reporting because investors and other stakeholders are increasingly interested in sustainable value creation. The Framework helps explain how a business creates value over time and provides transparency on every aspect of its activity. We think is best practice reporting.

At the core of our business model is integrated thinking, which drives everything we do. When we’re making decisions, we’re asking: How do we manage risk? What will it cost? What return will we receive? How does it tie into our long-term view? How does it align with what we stand for as a company?

[1] https://investor-centre.z.co.nz/investor-centre/assets/Uploads/Z-Energy-Annual-Report-2017.pdf

To meet investor demands

Research reports covers

XRB research undertaken—in collaboration with the McGuinness Institute—confirmed that stakeholders are increasingly demanding more non-financial information.[2]

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Stakeholders are demanding EER information for:

  • increased transparency on material risks (including environmental, economic and social risks) and strategies for managing those risks.

Stakeholders want to know that entities are ready to respond to material risks and take advantage of opportunities to enhance long-term value creation;

  • forward-looking information about an entity’s long-term sustainability.

Financial statements generally provide historical financial information; more forward-looking information about an entity’s long-term sustainability and prospects is needed to present a more holistic view of the entity;

  • information about an entity’s key resources and relationships.

To make better-informed decisions, stakeholders require more information about key resources—particularly resources unrecognised in the financial statements, such as unrecognised intangible assets. Stakeholders also require information about key relationships, including information about how key management personnel are remunerated; and

  • greater visibility around corporate citizenship. 

The concept of "social licence"—or license to operate—is increasingly being seen as critical to an entity’s success by many.

2.  Consistent with earlier research commissioned by the XRB on the information needs of users of for-profit entities’ financial reports.

Principles for Responsible Investment

Investors are incorporating EER information into their investment and ownership decisions.

The Principles for Responsible Investment (PRI) is an investor initiative in partnership with the UN Environment Programme Finance Initiative and UN Global Compact.  It encourages investors to use “responsible investment” to enhance returns and better manage risk.


PRI logo


The PRI defines responsible investment as a strategy and practice to incorporate environmental, social and governance (ESG) factors in investment decisions and active ownership.

...responsible investment is not the same as ethical investment, socially responsible investment or impact investing. While these approaches seek to combine financial return with moral or ethical considerations, responsible investment can and should be pursued even by the investor whose sole purpose is financial return, because it argues that to ignore ESG factors is to ignore risks and opportunities that have a material effect on the returns delivered to clients and beneficiaries. 

The PRI has over 2,300 signatories accounting for over $US70 trillion of assets under management. Signatories include BlackRock, The Vanguard Group Inc, State Street Global Advisors, AXA Group, JPMorgan, Credit Suisse and Goldman Sachs. New Zealand signatories include Accident Compensation Corporation (ACC) and the New Zealand Superannuation Fund.


Signatories commit to the following 6 principles


We will incorporate ESG issues into investment analysis and decision-making processes. 


We will be active owners and incorporate ESG issues into our ownership policies and practices.


We will seek appropriate disclosure on ESG issues by the entities in which we invest.


We will promote acceptance and implementation of the Principles within the investment industry.


We will work together to enhance our effectiveness in implementing the Principles.


We will each report on our activities and progress towards implementing the Principles.


Find out more about PRI

To satisfy regulator requirements or recommendations

Entities listed on an NZX licensed market

Through its Listing Rules the New Zealand Stock Exchange (NZX) requires entities listed on its licensed markets to make certain non-financial disclosures. These include disclosures about the gender composition of an entity’s Directors and Officers and information about an entity’s corporate governance policies, practices and processes.

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The NZX also recommends—in its NZX Corporate Governance Code (the NZX Code)—the disclosure of additional non-financial information, e.g. information about material exposure to environmental, economic and social sustainability risks and other key risks and how the entity plans to manage those risks. The NZX Code operates on a “comply or explain” basis.

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Other entities

For all other entities, the Financial Markets Authority (FMA) recommends—in its FMA Corporate Governance Handbook (the FMA Handbook)—entities to disclose non-financial information, e.g. information about policies and performance relating to environmental, social and governance (ESG) issues, including, where appropriate, information on material topics such as social and environmental issues, business ethics, and other relevant topics identified and assessed through a process to determine materiality.

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Find available EER Resources