Global Investment Manager Schroders announced that it has joined a group of 11 organizations in at statement backing seven recommendations for the upcoming Non-Financial Reporting Directive (NFRD). The statement was signed by a diverse group of stakeholders of NGOs, professional associations and companies including ACCA, Accountancy Europe, Association of German Banks (BdB), CDSB, EFAMA, Frank Bold, IIGCC, Schroders, ShareAction, and WWF, and was supported by asset managers BNP Paribas AM and Candriam as well.
The European Commission’s Directive 2014/95/EU – also referred to as the Non-Financial Reporting Directive (NFRD), is one of the landmark regulatory issues on the regulatory agenda this year affecting sustainable business and finance. The NFRD requires companies with more than 500 employees to disclose the non-financial risks and opportunities that they consider material for their business models, including many issues relating to the ESG and sustainability practices of those businesses. In February 2020, the European Commission launched a public consultation on the review of the NFRD, inviting commentary from stakeholders on the review until June.
In a statement, the group published support for seven specific NFRD recommendations:
“The European Union, and the world economy, are facing one of the biggest challenges of our time in designing the means and tools to foster a green economic recovery. It is more important than ever for both the private and the public sector to work together on policy priorities governments should take in reaction to this crisis. We believe that the Non-Financial Reporting Directive should make a leap forward in improving the quality, comparability, and consistency of environmental, social and governance (ESG) information.
As a group of stakeholders with different backgrounds, but a common interest in sustainable finance, we believe the following matters are instrumental in the upcoming revision of the NFRD:
- Expand the scope beyond large listed companies
- Disclose non-financial information in the annual management report
- Strengthen the social and governance aspects
- Develop minimum mandatory reporting requirements
- Build on existing reporting initiatives (to achieve comprehensive non-financial reporting)
- Keep up the international role for reporting standards
- Ensure legislative consistency and avoid duplication of reporting legislation”
Click here to read the full joint statement.