Featured Product

    EC Consults on Review of Non-Financial Reporting Directive

    February 20, 2020

    EC is launched a consultation on the review of the Non-Financial Reporting Directive or NFRD (Directive 2014/95/EU, as part of its strategy to strengthen sustainable investment in Europe. The Directive requires certain large companies to include a non-financial statement (for example, on environmental or social issues) as part of their annual public reporting obligations. The consultation is intended to collect views from across EU on possible reforms or improvements that could be made to the Directive. The consultation ends on May 14, 2020 and the feedback from this consultation will feed into the EC impact assessment on the review of the Directive. EC also published the remarks given by the Executive Vice-President Valdis Dombrovskis, at the IFRS Foundation Conference. Mr. Dombrovskis discussed ongoing and potential developments in the areas of the non-financial reporting, reporting in the European Single Electronic Format, and disclosures related to sustainable finance.

    A review of the Non-Financial Reporting Directive is an essential part of the effort of EC to scale up sustainable finance by improving corporate transparency and providing all stakeholders with more comparable and relevant information on sustainable business activities. In addition to this public consultation, EC will also conduct targeted surveys that will be addressed to small and medium-size enterprises and to companies under the scope of the  Non-Financial Reporting Directive. The targeted surveys will collect more detailed opinions and data from companies on certain issues, including costs related to non-financial reporting. In addition, the services of EC will soon launch a public consultation on a Renewed Sustainable Finance Strategy to seek stakeholder views on other issues related to sustainable finance, including questions on sustainable corporate governance.

    EU rules on non-financial reporting only apply to large public-interest companies with more than 500 employees. They cover approximately 6,000 large companies and groups across EU, including listed companies, banks, insurance companies, other companies designated by the national authorities as public-interest entities. The NFRD identifies four sustainability issues (environment, social and employee issues, human rights, and bribery and corruption) and with respect to these issues it requires companies to disclose information about their business model, policies (including implemented due diligence processes), outcomes, risks and risk management, and key performance indicators relevant to the business. It does not introduce or require the use of a non-financial reporting standard or framework, nor does it impose detailed disclosure requirements such as lists of indicators per sector. 

    In addition to the provisions of the NFRD, several other EU legislative acts require disclosures of sustainability-related information for financial sector entities:

    • The Regulation on prudential requirements for credit institutions requires certain banks to disclose ESG risks as of June 28, 2022.
    • The Regulation on sustainability‐related disclosures in the financial services sector requires financial market participants to disclose their policies on the integration of sustainability risks in their investment decision-making process and the adverse impact of investment decisions on sustainability factors, as of March 10, 2021.
    • The Regulation establishing a framework to facilitate sustainable investment (the Sustainable Finance Taxonomy) creates new reporting obligations, including for companies subject to the NFRD, starting in December 2021.

     

    Related Links

    Comment Due Date: May 14, 2020

    Keywords: Europe, EU, Banking, Insurance, Securities, Sustainable Finance, Disclosures, Reporting, Climate Change Risk, Non-Financial Reporting, EC, ESG

    Featured Experts
    Related Articles
    News

    APRA on Changes to Reporting Obligations for Banks Due to COVID-19

    APRA, in collaboration with the Reserve Bank of Australia (RBA) and the Australian Bureau of Statistics (ABS), published a letter outlining temporary changes in reporting obligations for authorized deposit-taking institutions and registered financial corporations, in response to COVID-19.

    April 01, 2020 WebPage Regulatory News
    News

    OSFI Outlines Capital Treatment for Some COVID-19 Mitigation Measures

    OSFI issued a letter outlining how federally regulated banks should treat the new capital made available to small and medium-size enterprises (SME) through the recently announced government programs.

    March 30, 2020 WebPage Regulatory News
    News

    APRA Announces Deferral of Capital Reform Implementation

    APRA announced that it is deferring the scheduled implementation of Basel III reforms in Australia by one year.

    March 30, 2020 WebPage Regulatory News
    News

    BaFin Explains Regulatory Measures to Address Impact of COVID-19

    BaFin has released new developments and important information about COVID-19 and its effects on the financial and banking system.

    March 30, 2020 WebPage Regulatory News
    News

    ECB Updates Recommendation on Dividend Distribution Policy of Banks

    ECB updated its recommendation to banks on dividend distributions.

    March 30, 2020 WebPage Regulatory News
    News

    EC Amends Implementing Standards on Supervisory Reporting Under CRR

    EC published Regulation 2020/429 that amends the Regulation 680/2014, which sets out implementing technical standards on supervisory reporting of institutions under the Capital Requirements Regulation or CRR (575/2013).

    March 30, 2020 WebPage Regulatory News
    News

    HKMA Announces Deferral of Implementation of Final Basel III Package

    HKMA announced its plans to defer the implementation of final Basel III package, inline with the timeline announced by the Group of Central Bank Governors and Heads of Supervision (GHOS).

    March 30, 2020 WebPage Regulatory News
    News

    BCBS Defers Implementation of Final Basel III Standards by One Year

    BCBS has announced deferral of the implementation date of the final Basel III standards by one year, to January 01, 2023.

    March 27, 2020 WebPage Regulatory News
    News

    EC Regulation on CCR Mitigation for Covered Bonds and Securitizations

    EC published the Delegated Regulation 2020/447 with regard to regulatory technical standards on the specification of criteria for establishing the arrangements to adequately mitigate counterparty credit risk, or CCR, associated with covered bonds and securitizations.

    March 27, 2020 WebPage Regulatory News
    News

    IFRS Publishes Statement on Its Work During the COVID-19 Crisis

    IFRS, in its statement, emphasized that it shares global concerns about the impact of COVID–19 and is supporting its stakeholders by reconsidering timelines of its meetings and publications, providing information on the application of IFRS 9 on financial instruments, and offering calendar updates on ongoing activities.

    March 27, 2020 WebPage Regulatory News
    RESULTS 1 - 10 OF 4913