After weeks of negotiations, government representatives before the EU have reached a last minute compromise on the reform on non-financial reporting during the COREPER meeting of February 26th 2014. This reform would lead to mandatory reporting on environmental, human rights, social, corruption and diversity issues for the 6 000 companies concerned. The reporting requirement would also include companies’ due diligence policies, which means that they would have to disclose the mechanisms put in place to identify, prevent, mitigate and account for adverse impact linked to their business activities. The obligation of non-financial reporting would also apply to companies’ supply chains, where most environmental and human rights abuses tend to be found. The final vote on this reform is to take place at the European Parliament’s plenary by April 2014, and later on at the EU Council.
FIDH, a steering group member of the European Coalition on Corporate Justice (ECCJ), welcomes this agreement on the non-financial reporting reform. FIDH has consistently been supporting mandatory non-financial reporting for businesses as one key element towards transparency and corporate accountability.
However if the proposed reform on non-financial reporting represent an important step towards greater corporate transparency, the scope of the reform remains too narrow and the list of non-financial elements to be reported on remains limited. The European Commission will need to address these loopholes in its implementation and future revision of the Directive on non-financial reporting.
ECCJ Press Release EU Compromise on Non-financial Reporting 26 Feb 2014