/ European Union: The European Parliament adopts the Directive on non-financial reporting
Investor News - 16/04/2014
European Union: The European Parliament adopts the Directive on non-financial reporting
The non-financial reporting directive, negotiated between the European Parliament, the Council of Ministers of the EU and the Commission was adopted on April 15, 2014 by the European Parliament. The vote counted some 599 votes for and 55 against.
This step was the last step in the adoption process of a text that would required listed companies and financial institutions with more than 500 employees, to publish annually their results but also their commitments on environmental protection, social and human rights issues, promotion of diversity and prevention of corruption.
Issues covered by the directive:
Environment: environmental incidence, energy consumption, greenhouse gas emissions, water consumption, atmospheric emissions
Human Resources: labour relations, employee participation, working conditions, health and safety at work
Human Rights: Respect for fundamental human rights, respect for freedom of association and the right to collective bargaining, non-discrimination, elimination of child labour and forced labour.
Community Involvement: dialogue with local communities, actions taken to ensure the protection and development of these communities
Business Behavior: prevention of corruption
Vigeo’s methodology covers all these issues and goes beyond.
The European directive will require companies to not only disclose their indicators but to state their commitments relative to these indicators recognizing that indicators alone do not capture the companies’ capacity to mitigate its risks. This approach is fully captured in Vigeo’s methodology.
Guidelines on how to report under the new reform, are expected from the European Commission within the next two years.
Vigeo is part of the Corporate Sustainable Reporting Coalition (CSRC) advocating for the approval of this directive. The CSRC was convened in 2011 by Aviva Investors and is a coalition of more than 70 financial institutions, professional bodies, NGOs and other relevant stakeholders representing US$2 trillion.