Today, the European Parliament adopted the long-awaited directive on the disclosure of non-financial and diversity information by certain large companies.
“This vote is a victory for transparency and this is a great day for the future of sustainability reporting,” said Teresa Fogelberg, Deputy Chief Executive, Global Reporting Initiative (GRI). “This agreement demonstrates the EU’s strong commitment to corporate transparency and sustainability – supporting smart, sustainable and inclusive growth, and paving the way for a sustainable global economy.”
Exactly one year from the launch of the legislative proposal by European Commissioner for Internal Market and Services, Michel Barnier, and after extensive negotiations between the three European bodies, today’s vote was the last step in the process.
The directive, which adopts a report or explain approach, introduces measures that will strengthen the transparency and accountability of an estimated 6000 companies in the EU. These so-called ‘Public interest entities’ with more than 500 employees will be:
- Required to report on environmental, social and employee-related, human rights, anti-corruption and bribery matters
- Required to describe their business model, outcomes and risks of the policies on the above topics, and the diversity policy applied for management and supervisory bodies
- Encouraged to rely on recognized frameworks such as GRI’s Sustainability Reporting Guidelines, the UNGC, the UNGP on Business and Human Rights, OECD Guidelines, ISO 26000 and the ILO Tripartite Declaration*
“GRI is proud to have played a central role during the development of the directive – providing expertise, facilitating dialogue and raising awareness,” added Ms. Fogelberg. This outcome is also the result of the close collaborative work of several stakeholders committed to enhancing transparency and the accountability of European businesses. “In particular GRI commends the work of Commissioner Michel Barnier, the Greek Presidency of the Council of the European Union and European Parliament Rapporteur Raffaele Baldassarre and the Shadow Rapporteurs for their leadership and commitment to transparency.”
“The demand by investors and civil society for greater transparency and accountability of undertakings is growing,” said MEP Raffaele Baldassarre. “The new rules will enable forward-looking business leaders to address this demand and to fully make use of the huge potential of CSR in order to increase their competitiveness while contributing to smart and sustainable growth in Europe.”
“This directive is the vital catalyst needed to usher in a new era of transparency in the largest economic region in the world,” said Ms. Fogelberg. “This is a truly historic moment and I am confident that this is just the beginning of a new era for transparency and sustainable and inclusive growth in the EU.”