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Vigeo Eiris News - 18/12/2013

Toward a mandatory reporting at European level

The Legal affair committee of the European Parliament has voted on December 17th its report on the directive proposed by the European Commission aiming to boost transparency on firms’ environmental and social impact.

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The proposed rules would require large EU companies (over 500 employees) to include in their management reports a non-financial statement on the impact of their activities relating to environmental, social and employee matters, including respect for human rights and efforts to combat corruption and bribery. This statement should provide comparable descriptions of the policies, risks and results related to these matters.

Large listed companies would also have to publish information on their diversity policy for boards, including information on the age, gender, disability, ethnic origin and educational and professional background of their members.

To help ensure that non-financial information published by companies is comparable, MEPs call on the European Commission to publish guidelines, developed in cooperation with stakeholders, on how to use international standards and non-financial performance indicators.

MEPs also amended the proposed rules to ensure that companies are not obliged to publish information on upcoming developments and negotiations if disclosure would “be seriously prejudicial to their commercial position”.

A majority of committee MEPs agreed to propose that when reviewing the directive in 2018 the Commission should consider introducing an obligation for large companies to disclose country-by-county information on profits, taxes and subsidies received where they operate. However, some MEPs wanted to propose including such a requirement immediately. The committee gave the rapporteur a mandate to start negotiations with the Council. A vote in plenary at the European Parliament is not foreseen before March 2014.

Keywords : ESG, Europe