How to Improve the Non-Financial Reporting Directive?
As the European Commission opens a consultation process with regard to possible revisions to the provisions of the Non-Financial Reporting Directive (NFRD), CSR Europe members are invited to share their inputs on how to make the NFRD fit for purpose.
The Non-Financial Reporting Directive (NFRD) requires large companies to annually disclose a range of non-financial information, including in relation to the environment, social and employee matters, human rights, and anti-corruption and bribery matters.
Since its adoption, the reporting landscape went through several changes and users’ need for non-financial information, in particular for the investment community, increased substantially and rapidly. In addition, the recent developments on the topic of Sustainable Finance, with the creation of an EU taxonomy for sustainable activities, highlighted the importance for companies to disclose substantial and accurate non-financial information.
In line with this, the European Commission is proposing to review the NFRD as part of the effort to scale up sustainable finance. How? By improving transparency and embedding sustainability into the corporate governance framework, as stressed in the European Green Deal.
An online questionnaire is currently open to collect feedback and comments until 14th May 2020. It consists of 45 closed and open questions divided into 8 clusters aimed at assessing the costs and benefits of three policy options identified by the EC during their inception impact assessment:
Continue with the current approach of nonbinding guidelines and update them;
Endorse an existing or future standard on non-financial reporting, which would remain voluntary for companies to use;
Revise and strengthen the existing NFRD provisions.
For this reason, CSR Europe is setting up a process to support all its members in influencing the future of EU mandatory reporting by sharing our individual and collective experiences, concerns and proposals. Moreover, companies can join activities of peer-to-peer learning as part of our community of practice on Total Impact Disclosure.