The European Council and Parliament have agreed a draft directive for the disclosure of non-financial and diversity information by certain large companies. The directive will, when adopted, require certain large EU companies to compile annually, a statement relating to environmental, social and employee-related matters, respect for human rights, anti-corruption and bribery matters. The statement will have to include a description of the policies, outcomes and risks related to those matters and will operate on a "comply or explain" basis. One of the other key provisions is the requirement for a description of the diversity policy within the company, with regards to age, gender, educational and professional background, to be added to the company's corporate governance statement.
The agreement must now be formalised by the European Parliament and the Council separately.
Scope Large public-interest entities (mainly listed companies and financial institutions) with more than 500 employees will be required to disclose relevant and useful environmental and social information in their management reports. This includes listed companies as well as some unlisted companies, such as banks, insurance companies, and other companies that are so designated by Member States because of their activities, size or number of employees. It is expected that approximately 6000 public interest entities Europe wide will fall within the scope of the directive.
Next steps The European Parliament is expected to vote on this proposal on 15 April with a vote by the Council expected at a later date.