Today, the 26th of June, the Commission formally adopted guidelines on the disclosure of environmental and social information. These guidelines will help companies to disclose relevant non-financial information in a consistent and more comparable manner. The aim is to boost corporate transparency and performance, as well as encourage companies to embrace a more sustainable approach.
Eurosif’s Executive Director, Flavia Micilotta, had this to say:
‘The much awaited NFR guidelines are finally out and to those of you, who like me, have been waiting for this with much anticipation, this is indeed a very exciting day. On top of the content these guidelines contain, the important focus is clearly the sign they represent for our industry and beyond. Their non-binding nature does not water down their intent and we hope they will continue to drive the sustainability momentum in Europe today.
These guidelines are focused on ensuring comparability across companies and sectors while providing the right linkages and inter-relations at hand between the different aspects of non-financial information. Materiality and its context remain the focus and companies need to be assessed on the same challenges and opportunities within their sector of operation, in order to increase comparability. The main elements of focus will be: development, performance, position and impact and each will be reviewed regularly as materiality is a truly evolving concept.
Emphasis has been placed on qualitative information which will provide the reader with the right context for the quantitative information. Companies are encouraged to be forward-looking in their analysis and disclose a narrative which allows users to understand their business model accordingly. The policies that are adopted will be explained in the due diligence framework, set against concrete objectives.
The risk management remains a point of attention. Companies are asked to approach their description and the way they relate to operations. In this way, companies can focus on the process they follow to determine the risks and their implications. This approach could be further strengthened by proposing a list of main categories of risks that companies are confronted with in general terms and more specifically, within their industries. Such an approach could push companies to go to the next level and detail the extent to which risks have impacts and describe their business plan to tackle those risks as part of their strategy. Nothing in the guidelines prevents companies from doing that, and we certainly hope most will do.‘