Company reporting under the EU Non-Financial Reporting Directive: warm words, not concrete targets

Anna Triponel

February 17, 2020

On 17 February, the Alliance for Corporate Transparency (a project initiated by Frank Bold with a range of civil society organisations) released its latest report analysing disclosure of 1,000 companies pursuant to the EU Non-Financial Reporting Directive. The analysis finds that the information provided is falling “far short” of expectations and that:

  • Disclosure generally fails to address concrete issues, targets and principal risks, and report outcomes
  • Only 14 % of companies report their Boards discussing specific issues in their non-financial report, and only 15 % report a link between sustainability objectives and executive remuneration
  • On climate change, only 35 % of companies have targets and only 28 % report on their outcome
  • The number of companies reporting specific issues and targets on climate change has reduced
  • Companies who chose to give no information at all about the general structure and risks of their supply chain has increased
  • Less than 4 % of companies report on measurement of actions to manage human rights risks
  • Only 7 % of companies express a commitment to remedy affected workers or communities
  • Over 75 % of companies do not provide information about supply chain transparency in their reports, with less than 1 % publicly listing their suppliers (with the exception of apparel)

The findings will feed into discussions at the European Commission level related to updating the directive and the development of the European Non-Financial Reporting Standard, as well as ongoing EU and national legislative discussions.

“The true challenge is whether fundamental environmental and societal change in our world is so rapid, that the legislation itself is failing to enable business, markets and society to adapt, respond and to meet those changes. The fact that the UN International Panel on Climate Change predicts that we have only a decade left to avert a disastrous climate change speaks for itself”                      

Richard Howitt, 2019 Research Report: An analysis of the sustainability reports of 1000 companies pursuant to the EU Non-Financial Reporting Directive (The Alliance for Corporate Transparency with Frank Bold, February 2020)

You may also be interested in

This week’s latest resources, articles and summaries.