EU to require corporate transparency on sustainability
Uses ‘report or explain’ approach
A proposal to introduce new sustainability reporting requirements across the European Union (EU) could open the door for a quantum leap in transparency and accountability among European companies, the Global Reporting Initiative (GRI) said recently.
GRI Deputy Chief Executive Teresa Fogelberg said the proposal could be the catalyst needed to usher in “a new era of transparency” in Europe, the largest economic region in the world.
The proposal adopted by the European Commission would require large companies to disclose information on the major economic, environmental, and social impacts of their business as part of their annual reporting cycle.
The proposal contains a ‘report or explain’ approach, requiring companies to provide information on their strategy, results and risks in six key areas - environmental, social and employee-related matters, human rights, anti-corruption and bribery. Should a company decide not to disclose information on any of these topics, they would be required to explain why this is the case. Companies that are already producing a standalone sustainability report using recognized frameworks will be considered to have met the requirements.