The EU Non-financial Reporting Directive has been adopted and must be implemented in member states by 6 December 2016. It is of significance to those working in labour law given the recent trend for trade unions to frame some disputes as human rights issues and to use global human rights concerns as a reputational pressure point against employers, for example, as part of their campaigns to grow union membership and access across the global operations of MNEs.
The Directive requires some larger companies with more than 500 employees to report annually on social and employee-related matters (expected to include the undertaking’s respect for trade union rights), human rights, anti-corruption and bribery matters. The report must include a description of the policies, outcomes and risks related to those matters and information on the due diligence processes implemented by the undertaking (and, where relevant and proportionate, its supply and subcontracting chains) in order to identify, prevent and mitigate existing and potential adverse impacts. Where the company does not have a relevant policy, the statement must provide a clear and reasoned explanation for not having one.
The Commission will be issuing guidance on these reporting requirements. It seems inevitable that increasing transparency in this way has the potential to increase leverage to trade unions and other campaigners. More than ever before, employee, labour and human rights are also becoming corporate governance issues, requiring HR, Legal and CSR to work together to ensure a cohesive, consistent and effective approach.