EU Directive - Europe’s largest companies will have to be more transparent about how they operate
On 15 April 2014 the European Parliament adopted the Directive on disclosure of non-financial and diversity information by large companies and groups.
Companies for which this new Directive applies will have to disclose information on policies, risks and results regarding environmental matters, social and employee-related aspects, respect for human rights, anti-corruption and bribery issues, and diversity on boards of directors.
BSD Consulting welcomes this Directive on disclosure of sustainability information. We consider sustainability reporting processes fundamental to advance transparency, accountability, and sustainable management. Since 15 years our experts develop relevant skills and offer various services to support our clients in the creation of reports about non-financial information.
The new rules will only apply to large companies with more than 500 employees, in particular, large public-interest entities (PIEs) with more than 500 employees will be required to disclose certain non-financial information in their management reports. Currently, around 2,500 large EU companies disclose environmental and social information regularly. This Directive, applying to PIEs with more than 500 employees, will affect around 6,000 large companies and groups across the EU.
The Directive gives companies significant flexibility to disclose relevant information in the way that they consider most useful, or in a separate report. Companies may use international, European or national guidelines which they consider appropriate (such as the Global Reporting Initiative, the UN Global Compact, or ISO 26000, among others).
The objective is to increase EU companies’ transparency and performance on environmental and social matters and, therefore, to contribute effectively to long-term economic growth and employment.
After the Council’s formal adoption, which is expected in the coming weeks, the directive will become law. The EU Members States will have two years to transpose the directive into their national legislation.
Update 10 July 2014: Article by Francisco Neves of BSD Consulting in Portugal (in Portuguese) in online magazine VER (Valores, Ética e Responsabilidade).