Briefing outlines issues to be addressed in EU Non-Financial Reporting Directive reform
"Countdown for the reform that will overhaul companies’ sustainability reporting obligations in Europe", 28 January 2021
The European Union will take major action in 2021 to expand its leading position on sustainable finance, in order to strategically redirect private and public money to sustainable activities...
...To achieve this, EU Commissioner for Financial Services Mairead McGuinness has been crystal-clear in her public appearances: we need to mobilise at least half a trillion euros per year of additional investments in the EU. She has identified the reform of the EU Non-Financial Reporting Directive (NFRD) as “one of the priorities to strengthen the foundations for sustainable investment”. Without reliable, comparable and meaningful sustainability data from companies, investors and banks will not be able to redirect needed finances towards sustainable investments, while companies themselves will be blind to major business risks and opportunities in the rapidly evolving economy...
...The EU Non-Financial Reporting Directive introduced in 2018 obligations for large European companies to disclose information on their sustainability risks and impacts. However, as shown by the Alliance for Corporate Transparency research, the quality and relevance of information is still critically poor, therefore missing the point of such legislation...
...[This piece] outline[s] ten key issues that will be addressed in the reform. Critically, the reform will extend the scope of the law. Currently, the Directive applies to approximately 5 thousand companies, which may be extended to an additional range of at least 35 thousand large companies, up to 100 thousand businesses if high-risk medium-sized companies are included, in EU-27...