EU Directive Calls for Corporate Disclosure of Non-Financial Information

(New York, 29 September 2014) – The UN Global Compact welcomes today's adoption by the European Council of the Directive on disclosure of non-financial and diversity information by large companies and groups. The Directive, which applies to large public-interest entities with more than 500 employees, points to the Global Compact and the Global Reporting Initiative among the frameworks that companies can follow to disclose information.

In line with the Global Compact’s Communication on Progress reporting requirement, the roughly 6,000 companies affected by the Directive will need to disclose information on policies, risks and results as regards environmental matters, social and employee-related aspects, respect for human rights, anti-corruption and bribery issues, and diversity on boards of directors.

Global Compact Executive Director Georg Kell views the Directive as, “a positive step which benefits active Global Compact participants from around the world that are publicly listed in the EU and already disclosing relevant extra-financial information annually.  They are ahead of the legislative curve.”

To date, over 27,000 Communications on Progress have been posted to the Global Compact website by participating companies. The Global Compact provides guidance on sustainability reporting ranging from basic to advanced levels. Additionally, the Global Compact collaborates with the Global Reporting Initiative and encourages companies to use complementary reporting frameworks, with the goal of facilitating more reporting and increasing transparency by business.

The European Parliament adopted the Directive on 15 April 2014. Following today’s adoption by the Council, the Directive will be published in the EU Official Journal and enter into force 20 days later. Member States will have two years to transpose the Directive into national legislation.

The passage of this Directive follows recent moves by BM&FBOVESPA and the Australian Stock Exchange’s Recommendation 7.4 to engender better quality extra-financial reporting by listed companies.  

For further information on the EU Directive:

• Read the Directive text.
• Read Frequently Asked Questions.