The EU NFR Directive update and its impact on business
27 June - 10 am EST | 3 pm BST | 4 pm CEST
In June 2019, the Non-Financial Reporting Directive (NFR Directive) is changing
Introduced in 2014, the NFR Directive requires large companies to disclose certain information on the way they operate and manage social and environmental challenges.
It aims to help investors, consumers, policy makers and other stakeholders to evaluate companies’ non-financial performance and encourage these companies to develop a responsible approach to business.
The European Commission publicly launched the changes to the NFR Directive at its stakeholder dialogue on sustainable finance on Monday 24th June*. Our webinar with Huhtamaki, ERM CVS and Novartis came at an ideal time to discuss the impact of the NFR Directive and the implications for businesses.
* During the event, the Commission publicly launched new guidelines for companies on how to report climate-related information. These guidelines were built on the proposals made by the Technical Expert Group (TEG) in January 2019.
Update: Datamaran submission to the NFRD public consultation
On 10 June 2020, Datamaran responded to the European Commission on Non-Financial Reporting Directive, focusing on the application of the materiality principle.
Our response can be articulated on four main pillars:
- Materiality shouldn’t be considered exclusively as a reporting activity, but should be regarded as the foundation for a more complete strategic risk management process.
- Technology has a dramatic impact on resource efficiency while ensuring accuracy of analysis, quality and auditability of data, and comprehensiveness of insights.
- ESG rating agencies or investors should take into account a company’s materiality determination process, and not penalize lack of disclosure on non-material indicators.
- Data driven materiality, based on a robust standardized procedure, would allow to move beyond idea that companies’ accountability consists in along list of indicators to disclose on, and bring it back where it belongs - to the Board.
You will hear from a leading global provider of environmental, health, safety, risk and social consulting services, a global food packaging specialist and the ESG risk management solutions provider Datamaran.
During the live webinar, we discussed:
- Materiality, disclosure, and alignment with the other frameworks and regulations, such as the TCFD and COSO.
- How our speakers’ organizational disclosure has evolved since the introduction of the NFR Directive.
- How the changes will affect businesses and what you can do to meet and mitigate this change.
- The typical requests our speakers receive from investors and other stakeholders, and how these requests have affected their reporting since the implementation of the NFR Directive.
In March 2018, the European Commission published the Action Plan on Financing for Sustainable Growth. Its objectives are to:
- Reorient capital towards sustainable investment.
- Manage the financial risks arising from climate change and other environmental and social problems.
- Foster a transparent and long-term approach in financial and economic activity.
As part of this, the Commission committed to updating the Non-Binding Guidelines on Non-Financial Reporting of climate-related information.
The 24th June summit will include a detailed discussion of the new guidelines for how companies should report climate-related information, built on the proposals made by the technical expert group on sustainable finance (TEG) in January 2019.