Non-financial reporting: the importance of data quality for success
With the emergence of new non-financial reporting (NFR) regulations, Lindt & Sprüngli has adapted its internal systems and processes over the past years to address the increasing complexity of reporting requirements. By leveraging both established processes and years of experience from financial reporting, as well as new technological solutions, Lindt & Sprüngli developed a robust organization for non-financial reporting focusing on data quality for strategic decision-making.
By Leander Nüssli
Lindt & Sprüngli previously used a decentralized approach for the collection of non-financial data. With the implementation of mandatory reporting requirements in Switzerland and the introduction of the EU Corporate Sustainability Reporting Directive (CSRD), Lindt & Sprüngli adopted a centralized approach. The new structure involves multiple departments in designated lead roles, representing the complexity of ESG data. To name some, the Group Finance department oversees the data collection process, including defining the metrics to be collected and reported, in collaboration with each subject matter expert (SME) for their respective areas. Leads at the Group level are responsible for the data collected within their topic area, its validation and providing guidance and support to subsidiaries. At the subsidiary level, the local Finance department is responsible for complete and accurate data reporting.
By establishing this new, centralized structure, the Group has significantly simplified and improved process efficiency and enhanced data quality. Lindt & Sprüngli now manages the process in a standardized manner, resulting in streamlined contact points, unified deadlines, consistent validation procedures, standardized data requirements, and centrally managed forms of data submission at subsidiary level. The implementation of a data consolidation tool has further supported such standardized reporting across all subsidiaries, facilitates the reflection of changes from internal validation, and seamlessly incorporates bottom-up reported data into the external sustainability report. To further simplify the procedure for all involved parties, Lindt & Sprüngli leveraged the knowledge and experience from the existing financial data collection process by using the same data consolidation tool, creating a manual with standardized requirements similar to the one used for financial data collection, providing clear instructions before each data collection cycle highlighting watchouts, deadlines, and ownership, introducing a standardized validation process, and defining the responsibilities for each step. These steps, which have been implemented in the financial reporting process for a long time, have proven to be highly effective and valued by all contributors.
Moving forward: lessons learned and next steps
Lindt & Sprüngli has completed several data collection cycles with the new setup, leading to the following key insights: 1) Implementing new processes and system takes time. While the procedures themselves seem clear, it takes time to implement them at both the Group and local level. Data collectors need to adapt to the new ways of working for themselves and their subsidiary, new tools, and the new requirements. 2) Provide the required support. This may consist of multiple trainings introducing changes and special watchouts before each cycle, lessons-learned sessions, follow-up emails, and responsiveness to all sorts of queries. 3) Detailed and early planning of the upcoming data collection process gives clarity and manages expectations. Timely communication to inform stakeholders of the necessary requirements, responsible parties, and due dates is key to coordinate all parties involved. 4) With rapidly evolving requirements, calculations of metrics or data collection requirements often require last-minute adjustments. To maintain accuracy and reliability, implement a multilayered validation process. Establish a four-eye principle to verify both data inputs and calculations, ensuring consistency and minimizing errors.
“To further simplify the procedure for all involved parties, Lindt & Sprüngli leveraged the knowledge and experience from the existing financial data collection process.”
Following the transition to an advanced data collection and consolidation tool, the next step will involve evaluating options for implementing visual data analysis methods. The objective is to help the Group’s subsidiaries comprehend the factors influencing their metrics and interact more thoroughly with the reported data. Additionally, with visual access to their impact, subsidiaries can better comprehend their contributions and implement changes locally. Through ongoing process improvement and the use of advanced tools, Lindt & Sprüngli continues to make progress towards its sustainability targets and fostering positive change around non-financial reporting throughout the Group.
Leander Nüssli
works as Corporate Controller at Lindt & Sprüngli. He is part of the consolidation/reporting team, amongst others responsible for the ESG tool implementation.