At a plenary sitting on 15 April 2014, the European Parliament adopted the directive on disclosure of non-financial and diversity information by certain large companies and groups.
At a plenary sitting on 15 April 2014, the European Parliament adopted the directive on disclosure of non-financial and diversity information by certain large companies and groups. The directive will enter into force once adopted by the Council and published in the EU Official Journal.
Selected Public Interest Entities will need to disclose information on policies, risks and outcomes relating to environmental matters, social and employee-related subjects, respect for human rights, anti-corruption and bribery issues and diversity in their board of directors. The scope includes approximately 6,000 large companies and groups across the EU.
The Directive leaves significant flexibility for companies to disclose the required information in the way that they consider most useful, or in a separate report. Companies may use international, European or national guidelines, in the manner that they consider appropriate (for instance, the UN Global Compact or ISO 26000).
The Directive provides for further work by the Commission to develop guidelines in order to facilitate the disclosure of non-financial information by companies, taking into account current best practice, international developments and related EU initiatives.
A further executive summary is provided below for your convenience. More information can be found on the website of the European Commission, in the Single Market section by following Accounting and Non-Financial Reporting.
Objective of the Directive:
The Directive concerns your entity if it meets ALL of the three criteria below:
1.Your entity is a large undertaking (balance sheet total of EUR 20 million or a net turnover of EUR 40 million
2.and your entity exceeds 500 employees during a financial year
3.and your entity is a public interest entity (listed on European stock exchange, bank or insurance company, designated as a public interest entity by national definition of EU Member States)
If your entity meets all three criteria, then it needs to include a non-financial statement in its consolidated management report.
If your entity is a subsidiary undertaking, they may be exempted from the reporting obligation if their parent entity includes the non-financial statement in the consolidated management report.
Comply or explain:
Liability and verification:
The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation.
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