The European Commission published a new update on the Non-financial reporting by large companies’ regulation proposal. EU law requires large companies (more than 500 employees) to disclose non-financial information on their social and environmental impact.
This initiative amends requirements in the Non-Financial Reporting Directive to ensure that investors, civil society and other interested parties have access to the information they need, while not imposing excessive reporting obligations on companies. It encourages companies to develop a responsible approach to business.
The European Commission opened the feedback period regarding this roadmap until the end of February 2020. The submitted views will be taken into account for further development and fine tuning of the initiative.
Read ECIIA’s feedback below.
«We welcome the Commission’s initiative to revise the NFRD, to achieve a greater degree of reliability, comparaibility of the information published.
Regarding the Standards, we observe the need for globally accepted standards to guide the assurance process around Non-Financial Reporting. Indeed, the assurance (both internal and external) has a significant role in the adequacy and reliability of the information published and the credibility of information reported to the public, by an organisation, cannot be sufficiently strong without a level of assurance.
More and more, we see the participation of external service providers in supporting organisation on its non-financial reporting journey . To maximise the benefits in the most cost efficient manner, it is crucial that the internal auditors partner with the external service providers in the realm of non-financial reporting services.
The Standards must also cover the appropriateness, completeness, accuracy of the information disclosed. Regarding the cost of compliance, the production of Non-Financial Reporting should not be seen as an outcome realised solely once a year. It should be integrated in the organisation’s sustainability mission, strategy and activities; and go beyond the first stage of compliance with relevant laws and regulations.
The organisations should also, as a second stage, measure and monitor sustainability performance. The third stage is achieved when oragnisations actively manage and continuously improve sustainability performance.
The goal should be to achieve this last maturity model as soon as possible for an effective impact. Again thank you for the opportunity and we look forward commenting the NFR Directive consultation.»