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Most companies in the EU and globally fail to disclose relevant information on sustainability, human rights and other ethical issues. In the light of climate change, loss of biodiversity, inequality and the rapidly increasing interest in companies’ sustainability performance, there is an urgent need for tightening reporting obligations.
The European Commission’s new proposal on the revised Non-Financial Reporting Directive (NFRD), issued on 21 April 2021, is therefore an important step to reduce harm done to people, society and the planet. However, the Commission addresses only about 0.2 percent of EU-based companies, and neither quantified comparable results nor incentives are considered.
To ensure the Directive delivers the social and environmental objectives, the European Parliament and Member States should broaden the scope, define more detailed reporting standards, make external audit mandatory and offer legal incentives to reward responsible companies, claims the Economy for the Common Good (ECG) in its new statement. “Non-financial information should be placed on an equal footing with financial information, in terms of scope, auditing, comparability and legal consequences” stated Christian Felber, initiator of the ECG.
Full press release, 21 April 2021 (PDF): Only one out of 500 companies will have to report on non-financial impact, under new EU rules