Hide Message

Updating the Resource Centre Digital Platform

The Business & Human Rights Resource Centre is at a critical point in its development. Our digital platform is home to a wealth of information on business and human rights, but hasn’t had a visual refresh for a number of years.

We will soon be updating the site to improve its usability and better serve the thousands of people that use our site to support their work.

Please take an advance peek at our new look, and let us know what you think!

Thank you,
Alex Guy, Digital Officer

Find Out More Hide Message

Reporting on human rights & sustainability remains 'troublingly poor', research on 1,000 European companies finds

New research by the Alliance for Corporate Transparency, analysing the information disclosed by 1000 European companies on their environmental and social impacts under the EU Non-Financial Reporting Directive, finds that the quality of reporting remains "troubling[ly] poor".

Key findings include

  • Disclosure focuses on general policies and commitments with the majority failing to provide concrete and specific information on targets, policy outcomes and risks and impacts
  • Only 1 out of 5 described their human rights due diligence process
  • Only 13.9% report on alignment of their climate targets with the Paris agreement goals.

The poor quality of company reporting also hinders efforts to scale up sustainable finance as investors do not have reliable information on which to base investment decisions. 

The release of the research comes as the EU Commission initiates the process to reform the law.

More information including the research report is available below. Click here to explore an open database with full research data.

Get RSS feed of these results

All components of this story

Article
4 May 2020

Commentary: ESMA report on regulatory activities related to corporate disclosure in the EEA exposes shortcomings of non-financial reporting regulation

Author: Filip Gregor, Responsible Investor

"ESMA exposes the shortcomings of Europe's non-financial reporting regulation", 20 April 2020

The European Securities and Market Authority (ESMA) has published its report “Enforcement and regulatory activities of European enforcers in 2019”, which includes the results of its assessment and actions taken to ensure the correct implementation of the reporting requirements introduced by the EU Non-Financial Reporting Directive...

The report frequently mentioned shortcomings such as the lack of quantitative disclosure, objective targets and accompanying assessment of whether the issuer was meeting those targets. Similarly, they referred to insufficient or missing descriptions of due diligence processes – particularly in relation to human rights and social matters - and mentioned insufficient description of risks and disclosures on environmental and climate change-related matters. This is in line with every major qualitative assessment of corporate sustainability reporting, including the research on 1000 EU companies non-financial statements carried out by the Alliance for Corporate Transparency...

ESMA’s report provided some numbers that could appear fairly optimistic concerning compliance of examined companies with the Directive. So, where is the catch?  

This is explained by the limits of enforcement of the law, as the requirements included in the Directive are vague and do not specify what concrete sustainability information should be disclosed... In other words, there is a significant difference between meeting the basic requirements and providing good disclosure. This is confirmed by the ESMA report, which states in general conclusion to the sample reviewed that there is significant room for improvement in the disclosures examined by enforcers...

Read the full post here

Article
17 February 2020

2019 Research Report

Author: Alliance for Corporate Transparency

17 February 2020

[W]hile there is a minority of companies providing comprehensive and reliable sustainability-related information, at large quality and comparability of companies’ sustainability reporting is not sufficient to understand their impacts, risks, or even their plans.

...Our results reflect a general lack of maturity especially for disclosure on climate-related scenarios used to inform company strategies (6.6% [of companies])...

...22.2% of companies report on due diligence processes and only 6.9% refer to their commitment to provide remedy for harmed people...

...A key finding of our research is the gap identified between company disclosure of human rights risks... and reporting on what companies do about such risks. Only 26.7% of companies disclose information on policies designed to address salient risks...

[O]nly 24.5% disclose steps taken to monitor supply chain conditions besides auditing. Numbers fall drastically when looking at information on corporate engagement with workers and communities in mapping and/or addressing supply chain risks (5.3%)...

Read the full post here

Article
17 February 2020

EU firms fall short on environmental and social impact data

Author: Ben Piven, Al Jazeera Impact

17 February 2020

[N]ew research published on Monday by the Alliance for Corporate Transparency shows that companies are releasing woefully insufficient data on climate and human rights performance...

"The EU is developing an agenda on sustainable finance. [T]here needs to be a major shift in the way capital markets and banks handle lending," said Filip Gregor, head of the responsible companies section at Frank Bold... "Companies mostly supply boilerplate risks, with no idea of the time horizon," Gregor said, suggesting that much of the material is created for public relations purposes.

"These results show that mandatory business transparency is a necessary, but insufficient, condition for change," said Phil Bloomer, executive director at the Business & Human Rights Resource Center, which along with groups such as the World Wildlife Fund and Transparency International also participated in the research.

"This assessment adds to the burgeoning evidence that the EU's leadership role in better business needs strengthened transparency regulation and a legal duty of care by companies for their workers, host communities, and the environment," he said...

"There is growing support from enlightened companies, investors, parliamentarians and governments, alongside activists," Bloomer added. "This action would set a level playing field for responsible business and expand legal risk for irresponsible companies if they continue to trash our precious planet, or abuse workers and communities in their supply chains."

...

Read the full post here

Article
17 February 2020

Landmark research on 1000 European companies shows troubling poor quality of reporting on sustainability issues

Author: Alliance for Corporate Transparency

17 February 2020

Common problems

- Disclosures are not specific enough to enable understanding of a company’s position and future developments...

Climate

- 13.9% of companies report on alignment of their climate targets with the Paris agreement goals...

- Only 13.4% of financial companies provide details on the exposure of their portfolios to the most polluting sectors.

Human rights

- 22.2% of companies provide some information on their human rights due diligence process, despite 82.8% reporting a human rights policy...

- 25.5% of companies disclose specific human rights risks facing them..., yet only 14.6% report on the actual impacts..

- 13.6% of companies in the Apparel & Textiles... do disclose their ultimate suppliers in high-risk countries for human rights, which is a major improvement

Anti-Corruption

- A vast majority (88.1%) of companies report on anti-corruption policies, but only 33.7% describe how these are implemented...

Read the full post here

Article
17 February 2020

Sustainability disclosures by European companies generally poor: study

Author: Simon Jessop, Reuters

17 February 2020

[A] study of disclosures from 1,000 firms by the Alliance for Corporate Transparency, a collaborative initiative launched by public interest law firm Frank Bold, showed big gaps between many companies’ words and action.

On climate, for example, the study showed that while 36.2% of firms had set a climate target, only 13.9% of companies had ensured they aligned with the 2015 United Nations-backed Paris climate deal...

Filip Gregor, Head of Responsible Companies at Frank Bold, said it was “alarming” so few companies were in sync with Paris. “The results of the research show that existing EU legislation is not meeting its objectives and it seems that the only way to address the problem is to specify what companies should be reporting..."

Of the companies analyzed, just 23.4% provided specific information allowing readers to understand the risks facing them, the report said, even though 53.8% of companies said they recognized the existence of such risks...

Reprinted in The New York Times

Read the full post here