The Directive 2014/95/EU (referred to as the Non-Financial Reporting Directive) lays down the rules on disclosure of non-financial and diversity information by certain large companies, amending the Accounting Directive 2013/34/EU.
Who must comply?
NFRD applies to large public-interest companies with more than 500 employees, with approximately 11,7000 companies and groups captured across the EU. Types of companies include:
- Listed companies
- Banks
- Insurance companies
- Other companies designated by national authorities as public-interest entities.
What must be disclosed?
Under the NFRD, large companies have to publish information related to:
- Environmental matters (e.g. greenhouse gas emissions, energy use, etc.)
- Social matters and treatment of employees (e.g. employee development and compensation)
- Respect for human rights (e.g. child rights, labour rights, etc.)
- Anti-corruption and bribery
- Diversity on company boards (in terms of age, gender, educational and professional background)
Companies are currently given the freedom to disclose this information in the way they deem best, however in 2017 the European Commission published a set of non-binding guidelines to help companies disclose relevant non-financial information in a more consistent and comparable manner.
The Corporate Sustainability Reporting Directive will soon replace and build on the NFRD by introducing more detailed reporting requirements and expanding the number of companies that have to comply.