EU Non-Financial Reporting Directive

CDSB is working closely with EU Institutions and Member States to ensure the implementation of the Non-Financial Reporting Directive (NFR) across the European Union is achieved using international reference points such as the CDSB Framework for reporting environmental information.

The Non-Financial Reporting Directive (NFRD) is currently under review. 
Read CDSB's key proposals to ensure that the Directive is fit for purpose.

The Directive 2014/95/EU on disclosure of non-financial and diversity information by certain large undertakings and groups amends the Accounting Directive 2013/34/EU. It requires around 6,000 companies across Europe to disclose in their management report information on policies, risks and outcomes as regards environmental matters, social and employee aspects, respect for human rights, anticorruption and bribery issues, and diversity in their board of directors. CDSB welcomes the Directive as a significant step to increase corporate transparency, relevance, consistency and comparability of non-financial information of around 6,000 large enterprises across Europe.

Although some aspects of the Directive could be improved, CDSB believes that the legislation should serve as a minimum set of requirements across the Union. 

CDSB will work at the EU level to improve the Directive to clarify its requirements and incorporate recent developments, such as the recommendations of the Task Force on Climate-related Financial Disclosures. The 2018 review of the Directive offers an opportunity to make these updates swiftly.

At the Member State level, CDSB will continue building capacity and providing guidance to companies to support the reporting of decision-useful non-financial information to financial markets.

Areas for improvement

  1. Make reporting in the management report mandatory by removing the exemption to allow thenon-financial statement to be reported outside the management report
  2. Increase scope by changing business size to >250 employees, as by definition of PIEs in Accounting Directive as opposed to >500
  3. Explicitly state the word climate in the Directive

Follow the link to find out more about key proposals and tracked chages to the NFR Directive.

An opportunity for the European economy

The next update to the NFRD must provide the catalyst to push companies to increase their disclosure on environmental and climate risks and opportunities and ensure that investors are fully informed about the sustainability of their investments. A light touch to the existing Directive simply won’t do and certainly won’t channel the extra €260 billion needed in annual investments to deliver on the EU’s 2030 climate and energy targets. 

The suggestions above are a snapshot of CDSB's position. We welcome the opportunity to discuss the position and tracked changes to the NFRD with you. 

Read our full draft positions and tracked changes to the NFRD. 

Get in touch with Michael Zimonyi, the Director of Policy and External Affairs here at CDSB to discuss in more detail: