No. but it will give many more card when its ON. Location reporting is a google location service which any android app can use to provide you location related features.
Having it on lets Google Now provide more specific results based on your location. For example, if you use Google Now often to search for directions or nearby businesses, it will provide you results based on your location.
It will give weather, dining, bars, events, concerts, shows, etc. based on your immediate location. You can use it on battery saving mode to conserve battery.