Non-financial reporting Directive: a call for views on effective reporting alongside proposals to implement EU requirements

About this consultation

Agreement has been reached on a new set of measures to harmonise the ‘non-financial’ information that companies need to disclose.

Background

The ‘Directive 2014/95/EU of the European Parliament and of the Council of 22 October 2014 amending Directive 2013/34/EU as regards disclosure of non-financial and diversity information by certain large undertakings and groups’ came into force on 6 December 2014.

Proposed changes

Member States have two years to transpose it into national legislation. The provisions in the EU Directive will apply to a limited number of European companies’ namely very large listed undertakings. In addition, they may apply to a small number of private companies, because of their business as credit institutions or insurers. The new package of disclosures broadly reflects the UK narrative reporting framework introduced in October 2013.

This BIS consultation highlights some of the overlaps and similarities. Firstly, it asks questions on the approach to implementing the European Directive, aiming to:

  • Raise awareness of the Directive requirements among relevant stakeholders
  • Seek views on UK plans to transpose this Directive into UK law, including use of any flexibilities.

Secondly, it explores whether there is a desire for wider reforms to the scope of narrative reporting by companies in the UK.

Consultation questions

Please send us your responses to the BIS consultation questions (listed below) or any other comments to consultation@iosh.co.uk by 31 March 2016.

Q1 Flexibility on where to provide the non-financial statement: What is your view on permitting companies flexibility to place information where they feel most appropriate within the boundaries laid out by the EU NFR Directive? Please explain your reasons.

Q2 Information that could be placed in a separate report: We would welcome suggestions for information, currently required by law that could be placed in the separate report

Q3 Advantages and disadvantages of a separate non-financial statement: What do you see as the advantages and disadvantages, for your organisation of the separate statement?

Q4 Advantages and disadvantages of the implementation options: What do you see as the advantages and disadvantages of the various implementation options? Comments

Q5 Preferred option relating to scope: Considering the possible advantages and disadvantages provided by the flexibilities contained within the EU NFR Directive, which would be your preferred option in terms of which companies should be required to disclose non-financial information?

Q6 Alternative options: Are there any other options for implementing the EU NFR Directive the Government should consider?

Q7 Assurance of non-financial information: Should the Government require that the non-financial statement be verified by an independent assurance service provider’?

Q8 Advantages and disadvantages of third-party validation: What do you see as the advantages and disadvantages of requesting third party assurance?

Q9 Other options: Are there any other options the Government should consider for Third Party Verification?

Q10 Advantages and disadvantages: What do you see as the advantages and disadvantages of preparing or receiving the non- financial statement electronically via a company’s website?

Q11 Additional protections: Considering your response to Q7, are there any additional protections that the government should consider?

Q12 Number of companies providing an electronic report: BIS are interested in the number of companies that currently send their annual report electronically. Considering your shareholders, how many, as a percentage, opt to receive their annual report as a printed copy?

Q13 Definition of senior manager: BIS would welcome suggestions as to how this definition may be improved to reflect better the intention of this requirement.

Q14 Other Comments on this requirement: BIS would also welcome other comments on this regulation including views on the approach suggested

Q15 Reporting Regulations: What other reporting regulations would you suggest that could be repealed?

Q16 Other Information: Is there any information that could be moved outside the Annual Report?

Q17 (a-g) Analysis of the Costs and Benefits of implementing the NFR Directive: By type of Organisation.

Q18 Additional comments.

IOSH members wishing to also respond individually to the EC can do so by visiting here and responding by 15 April 2016.