Research across Harvard, Oxford, Cambridge, the Financial Reporting Council and digital readership studies points in the same direction: corporate reporting has become so long, dense and complex that much of it is now functionally unread by the very audiences it claims to serve.

Harvard-linked accounting research, building on computational analysis of corporate filings, has shown that annual reports often sit above 19 on the Fog Index. That matters because a Fog Index of 12 to 14 is generally considered accessible for serious public communication, while scores above 18 are effectively “unreadable” for most readers.  Corporate reporting has therefore moved beyond complexity into exclusion. To make the most of reports, nowadays, you need technical fluency, stamina and tolerance of legalistic language.

UK research and regulatory findings reinforce this. Work associated with Oxford, Cambridge and the FRC highlights the “front half” explosion in annual reports: the expanding mass of governance, sustainability, risk and narrative disclosure that now sits before, around and beyond the numbers. These additions often begin as legitimate attempts to improve accountability. But cumulatively they create cognitive overload. The result is a document that is comprehensive in theory and impenetrable in practice.

The most striking figure is the “7% reality”: only 7% of people who open or view a digital annual report are reported to read it end-to-end. That should make every reporting, sustainability and investor relations team pause. Ninety-three per cent are not reading the thing in the way the organisation may imagine. They are skimming, sampling, or simply abandoning.

But the problem is not just that reports are long, their length and density are damaging trust.  Research cited in the Harvard accounting literature suggests that when companies have been underperforming, their reports tend to become longer and harder to read. Put simply, dense language is not always accidental: sometimes it’s the smoke around the fire. Or be perceived to be how bad news is buried.

So, more disclosure does not necessarily create more confidence; it creates suspicion. The company thinks it has provided evidence but the reader senses evasion.

And ESG reports face an even sharper version of the same problem.

While a standard annual report has the gravitational pull of the financial statements, ESG reporting is more diffuse. It deals in goals, commitments, baselines, methodologies, trade-offs, time horizons and often there are disputed definitions. It demands context and requires readers to understand not only what happened, but what progress means.

The ESG report in the dominant format, the long PDF, is not doing the job.

PwC’s Global Investor Survey found that only a third of investors rated the quality of ESG reporting as good, only 29% believed current reporting adequately describes the impact of ESG on business performance, and only 40% trusted corporate ESG data without independent assurance. Stanford research into investor attitudes adds another warning: between 2022 and 2024, younger institutional investors became sharply more sceptical of standard ESG messaging, with greenwashing fears driving the decline.

Meanwhile, these ESG reports are having to serve many different parties, who have many different demands of the report, certainly quite different from the investor group.  A WU Vienna study of more than 300,000 digital interactions found that internal employees, analysts, students, job applicants, customers, suppliers and sustainability specialists all appear in the mix.  A very different audience from the imagined figure of the diligent investor reading from page one to page 180.

The modern corporate report has become trapped between two failures. It is too dense to be widely read and too polished to be widely trusted. It contains more evidence than ever, yet often fails to create conviction. It usually reports outcomes, sometimes records effort, but rarely makes effort felt.

In the second part of this piece, we show that the most regular reader of the annual and ESG reports isn’t even human: it’s the LLMs.  So, this creates an even bigger challenge for those hoping to make their reports impactful on their stakeholders.

(Sources in Part 2)