The onset of the COVID-19 pandemic has changed the business landscape in innumerable ways. Companies have accelerated the pace of digital transformation, adopted the hybrid working model, and switched their preference to digital reports.
Digital reports began gaining prominence, particularly since the outbreak of the novel coronavirus. Compared to the traditional version, digital copies are user-friendly, flexible to incorporate changes, and eco-friendly. From an environmental standpoint, digital copies can save the cutting of trees and contribute to conservation as it takes 24 trees to produce 1 tonne of paper. Digital copies also help companies to cut the cost that goes towards printing hard copies.
Owing to the multiple benefits such as ease, cost, and convenience, public companies sent several representations to the Security Exchange Board of India (SEBI), which in turn has dismissed the requirement to send hard copies of Annual Reports to shareholders till December 2022. In the same month, the Ministry of Corporate Affairs (MCA) exempted companies from releasing physical copies of financial statements till December 31st, 2022, setting the ground ready for permanent changes in the format of corporate reporting.
The COVID-19 pandemic has pushed companies to adapt to Augmented Reality (AR) and Virtual Reality (VR) as businesses shifted to a remote working setup. Even consumer spending on these technologies increased by 50% to reach US$12 billion in 2020 from the previous year. The trend has spurred interest in the concept of using AR and VR technologies in corporate communications. The Financial Reporting Lab of the UK Financial Reporting Council (UK FRC) reports that corporate reporting will move towards AR and VR technologies in the next five to ten years. Traditionally, companies have used these technologies for training, prototyping, manufacturing, and events. However, these technologies can be used to present information in the form of 3D graphs and charts as opposed to static ones.
AR and VR in Corporate Reporting
The concept of using AR and VR is picking up pace in the world of corporate reporting due to various benefits such as:
Ability to consistently and cost-effectively offer experiences for a wider audience
Ability to enable users to interact with virtual elements
Ability to highlight text individually or sequentially to enhance user understanding of documents
The report published by the UK FRC divides digital experiments in corporate reporting into three levels of implementation. In level 1, QR codes can be used to launch videos, slideshows, and other media and can be used to open sustainability reports or digital versions of Annual Reports. In level 2, VR-based cover pages can be designed to create more engaging and appealing reports. Level 3 is a fully virtual report and a possible Level 4 is expected to leverage both AR and VR to enhance the Annual Reports.
One other trend in the field of reporting that has gained traction in the backdrop of the COVID-19 pandemic is the emergence of Environmental, Social, and Governance (ESG) reporting. The death and destruction brought by the pandemic have contributed to conscious and responsible investing among shareholders. The impact of the pandemic outbreak on the world economy has forced policymakers and investors to view it as a wake-up call to save the planet and opt for a different approach to investing. The ESG aspects of a company, including response during COVID-19, are increasingly examined by investors to foster sustainable investing. In addition to this pandemic-increased scrutiny, increasing climate change concerns are driving companies to move beyond financial reporting and provide a holistic view of their business impact on people and the planet.
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