European Parliament adopts Directive on disclosure of non-financial and diversity information
16 Apr 2014
The European Parliament has voted in favour of amendments to European accounting legislation in order to require certain large companies to provide additional information on social and environmental matters. These companies will have to disclose information on policies, risks and results as regards environmental matters, social and employee-related aspects, respect for human rights, anti-corruption and bribery issues, and diversity on the boards of directors.
The amendments had been proposed by the European Commission in April 2013. The objective of the proposal was to increase EU companies' transparency and performance on environmental and social matters, and, therefore, to contribute effectively to long-term economic growth and employment.
The new rules will only apply to large companies with more than 500 employees, as it was believed that the costs for requiring small and medium-sized enterprises to apply them could outweigh the benefits. The scope now includes approx. 6,000 large companies and groups across the EU. However, the requirements in the Directive need not be applied where a company already includes in its annual report a comprehensive report relying on prescribed frameworks (such as the UN Global Compact, ISO 26000, the German Sustainability Code, or GRI guidelines) covering the information required.
In order to become law, the Commission's proposal needs to be adopted jointly by the European Parliament and by the EU Member States in the Council. The Council is expected to formally adopt the proposal in the coming weeks.
The full text adopted by the Parliament is available on the Parliament's website (please refer to Part 5, pp 312-346).
