Directive (NFRD) on the disclosure of non-financial and diversity information by certain large undertakings and groups 2014/95

Directive of the European Parliament and of the Council 2014/95/EU (NFRD) Non-Financial Reporting Directive of 22 October 2014 amending Directive 2013/34/EU as regards the disclosure of non-financial and diversity information by certain large undertakings and groups Text with EEA relevance.

This Directive shall enter into force on the twentieth day following its publication in the Official Journal of the European Union.

The main focus is disclosure of non-financial and diversity information by large businesses and groups.

The directive responds to the need increased transparency in the area of social and environmental information provided by businesses. The European Parliament emphasized the importance of information on sustainability, especially in the social and environmental fields.

Main points of the directive:

• Coordination of national regulations: The directive emphasizes the need to coordinate national regulations regarding the disclosure of non-financial information by large companies. This is important for the interests of companies, shareholders and stakeholders, especially if companies operate in several Member States.
• Minimum requirements: Minimum legal requirements are introduced for the extent of information that businesses must disclose. It's about providing unbiased and complete overview of policies, results and risks.
• Non-financial statement: Large businesses must prepare non-financial statement, which contains information on environmental, social, employment issues, respect for human rights and the fight against corruption.
  • Content of the report: The report should describe the company's policies in these areas, their results and risks. It should also include information on supply chain due diligence policies.
  • Exceptions: Member States may exempt companies from the obligation to prepare a non-financial statement if there is already a separate report with the same content.
  • Detailed information: The report should also contain information on the company's impact on the environment, measures to ensure gender equality, working conditions, social dialogue, safety and health protection at work and measures to protect local communities.
• Risks and their impact: Businesses must provide information about risks that could have serious negative consequences. These risks may arise from or be related to the company's operations, including its products, services and business relationships.
• Reporting frameworks: Companies can rely on national, European (e.g. EMAS) or international frameworks (e.g. UN Global Compact initiative, OECD, ISO 26000) when providing information.
• Enforcement: Member States must ensure effective means of enforcement disclosure of non-financial information in accordance with the directive.
• Importance for investors: Investors' access to non-financial information is an important step to support investments in business efficiency.
• Focus on large enterprises: New disclosure requirements they only apply to large companies and groups, in order to minimize the burden on small and medium-sized enterprises. The obligation to publish a non-financial statement applies to large enterprises that are subjects of public interest and to parent enterprises of large groups with more than 500 employees.
• Consolidated Reports: For groups of enterprises, consolidated management reports are required to ensure comparability and consistency of information.
• Information verification: Statutory auditors check whether a non-financial statement or separate report has been provided. Member States may also require verification of information by independent assurance service providers.
• Commission Guidelines: The Commission is to develop non-binding guidelines on the methodology for reporting non-financial information, including key performance indicators.
• Diversity Policy: Large companies must disclose their diversity policies in administrative, management and supervisory bodies (eg age, gender, education). If they do not have such a policy, they must explain why.
• Implementation report: The Commission will submit a report on the implementation of the directive to the European Parliament and the Council, in which it will also evaluate its scope and effectiveness.

Conclusion:

Directive 2014/95/EU represents an important step towards greater transparency and corporate responsibility. Its aim is to provide investors and other interested parties with a comprehensive overview of the company's non-financial performance, particularly in areas such as environmental responsibility, social affairs and governance. Spring