STRATEGY AND COMMUNICATION

European Parliament adopts Directive on disclosure of non-financial and diversity information

30 may 2014

The plenary of the European Parliament adopted on 15 April 2014 the directive on disclosure of non-financial and diversity information by certain large companies and groups.
European Parliament adopts Directive on disclosure of non-financial and diversity information

Companies concerned will need to disclose information on policies, risks and outcomes regarding environmental matters, social and employee-related aspects, respect for human rights, anti-corruption and bribery issues, and diversity in their board of directors. The objective is to reinforce transparency on non-financial activities of companies in all sectors and all of the Member States and increase the trust of investors and consumers in relation to the companies.

                                                                       

The document, which integrates Directive 2013/34/UE on financial statements reporting, will be submitted for the approval the Council of the European Union in the next few months (indicatively next September).  In the succeeding 24 months the Member States should adopt the directive in their national legislature.

 

As of now, all is well, but to whom does the Directive apply?  The directive will be applied to all companies that exceed an average number of 500 employees during the financial year, and, on their balance sheet dates, exceed either a balance sheet total of EUR 20 million or a net turnover of EUR 40 million. They must be of public interest: We are referring to companies that are listed on an exchange, banking and insurance institutes, and other enterprises considered as such by national legislation by reason of their activity, their size, or their corporate form.  Small and medium size enterprises are at the moment excluded from such obligation.

 

In practice several of these companies have already presented a non-financial accounting measure, more or less formalized in a report on sustainability.

 

Therefore – is there a lot of noise for nothing?  We don’t think so. It is another step towards the formalization of a responsibility that the larger companies have engagement with their stakeholders.  Because the larger companies also have an enlarged responsibility, that of stimulating a more sustainable behavior on the part of the smaller companies that are often their clients, as directed by ISO 26000.

 

The new document published last May 2 by the Global Reporting Initiative, Ready to Report? Introducing Sustainability Reporting for SMEs goes in this direction. This publication is directed at small and medium size enterprises that are considering whether sustainability can be a relevant instrument for them, and how to start the process of reporting in a realistic and coherent manner within their own context.  It furnishes a simple introduction to sustainability reporting   (on the basis of the new G4 guideline), for the purpose of helping the small to medium sized enterprises take the first small steps along the road to sustainability.  The document can be downloaded at the following address:  GRI’s Resource Library.

 

L. Gallotti