The EC has adopted guidelines to help companies make better disclosure on the environmental and social impact of their activities.
The guidelines aim to help companies develop their non-financial reporting in ways that are more consistent and comparable. The EC says it wants to boost corporate transparency and performance, as well as encourage companies to embrace a more sustainable approach.
“Europe needs to take the lead in making economies greener and more sustainable,” Valdis Dombrovskis, Vice-President responsible for Euro and Social Dialogue, Financial Stability, Financial Services and Capital Market Union, said: “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.”
Meanwhile, the EC’s high-level expert group on sustainable finance has published its first report setting out concrete steps to create a financial system that supports sustainable investments. The Commission intends to explore some of the report’s recommendations that may help create a low carbon, more resource-efficient and sustainable economy.
“It will be very important for organisations to have robust processes underpinning their non-financial reporting systems,” Henrik Stein, ECIIA President, said. “Internal audit’s unique oversight position as the third line of defence gives it a critical role to play in helping organisations improve their non-financial reporting capabilities.”
The adoption of the new guidelines will supplement the already existing EU rules on non-financial reporting (Directive 2014/95/EU). 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.