Executive Vice President Valdis Dombrovskis already announced in January that following the publication of the Green Deal and the initiation of the revision of the EU Non-Financial Reporting Directive (NFRD), he would invite EFRAG to “undertake preparatory work for the elaboration of possible EU non-financial reporting standards”.
This week, EFRAG -an accountancy advisory body set up by the EU Commission- has received the official request to establish a multi-stakeholder Project Task Force to produce a report by October 2020 and deliver its final recommendations in early 2021. The role of these standards would still need to be proposed and approved by the EU Commission, the Council and the EU Parliament during the reform process of the EU NFRD. However, Dombrovskis wishes to start this work to enable a swift implementation of the standards as soon as co-regulators reach an agreement.
Filip Gregor, Head of Responsible Companies at Frank Bold and member of the EFRAG European Reporting Lab, is leading the Alliance for Corporate Transparency. Earlier this year, this initiative presented the results of the largest research on companies’ sustainability disclosures, which clearly put in evidence the need to specify and develop the reporting requirements in the Directive and develop mandatory sector-specific standards.
In response to this recent announcement, Mr Gregor said:
“The creation of EU standards on corporate sustainability reporting is an indispensable step to ensure that companies disclose comparable and decision-useful information. The reform of the NFR Directive and the development of standards hold the key to achieve the objectives marked in the European Green Deal. We can’t create a sustainable economy and financial system without getting the first layer right: information on companies’ sustainability risks and impacts.
You can find further details about this announcement here. More information about the research carried out by the Alliance for Corporate Transparency on 1000 European companies here and a joint NGO statement supporting the EU Commission plans here.
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The experience with the implementation of the Non-Financial Reporting Directive (NFRD) and the analysis of the current status of companies’ sustainability reporting indicates that without clearer legal requirements, no guidance, no matter how good, will have substantial effect on the quality of companies reporting.
Over 20 leading NGOs working on corporate transparency have published a statement calling on EU policy-makers to define companies’ disclosure obligations on sustainability issues on the occasion of tomorrow’s high-level conference on the future of corporate reporting hosted by the European Commission in Brussels.
Under the Alliance for Corporate Transparency project Frank Bold and its partners have analysed how European companies disclose information necessary for understanding their impact on society and the environment, as required by the EU Non-financial Reporting Directive*.
