The european Union has today adopted guidelines on the disclosure of environmental and social information. These guidelines will help companies to disclose relevant non-financial information in a consistent and more comparable manner.
The aim is to boost corporate transparency and performance, as well as encourage companies to embrace a more sustainable approach.
The adoption of today’s guidelines will supplement the already existing european rules on non-financial reporting. In fact, the european directive entered into force on 6 December 2014 with practical effect as of 2018 on information relating to the 2017 financial year.
Companies falling within its scope have to disclose relevant information on policies, risks and results as regards environmental matters, social and employee-related aspects, as well as respect for human rights, anti-corruption and bribery issues, and diversity on the boards of directors.
The disclosure requirements for non-financial information apply to certain large companies with more than 500 employees gives them significant flexibility to disclose relevant information in the way that they consider most useful, including in a separate report. Costs for companies associated with the Directive are commensurate with the value and usefulness of the information, and with the size and complexity of their business.
The deadline for transposition into national legislation by Member states was 6 December 2016.
The new guidelines will support companies in fulfilling their reporting obligations under current non-financial disclosure requirements and will promote smart company reporting, to perform better over time, as well as to enjoy lower financig costs, to attract and retain talented employees.
Well-informed business and investment decisions have much better chances to succeed.
Appropriate non-financial discosure is also an essential element to enable sustainable finance (developing an overarching and comprehensive european strategy on sustainable finance as part of the capital markets Union).
The vice-president, responsible for euro and social dialogue, financial stability, financial services and capital market Union, said:
Europe needs to take the lead in making economies greener and more sustainable. This is why we are today proposing flexible guidelines to boost corporate transparency across all sectors.
By providing relevant information on their environmental and social credentials, companies are doing themselves a favour and helping their investors, lenders and society at large.