The new Directive, which amends the Accounting Directive, applies to large public-interest entities with more than 500 employees. Public-interest entities include listed companies as well as some unlisted companies, such as banks, insurance companies and other companies that are so designated by Member States because of their activities, size or number of employees.
Such companies will be required to disclose information in their annual reports on environmental, social and employee matters, respect for human rights, anti-corruption and bribery matters. The disclosure will need to include a description of the policy pursued by the company related to these matters, the results of these policies and the risks related to these matters and how the company manages those risks. The Directive does not require companies to comply with integrated reporting.
Welcoming the adoption of the Directive, the European Commission highlighted:
Companies in the scope of the Directive will disclose relevant, useful information necessary for an understanding of their development, performance, position and impact of their activity, rather than detailed reports. Furthermore, the Directive provides companies with 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.
As the European Parliament already adopted the Directive in April 2014, the Directive will now be published in the EU Official Journal and enter into force 20 days later. Member States will have two years to transpose the Directive into national legislation. Therefore, companies concerned will start reporting under the new Directive as of their financial year 2017.
Please click for:
- Press release on the website of the Council of the European Union
- Statement on the European Commission's website