BIS has published a consultation paper asking for views on the best approach to implementing the requirements of the EU Non-Financial Reporting Directive [2014/95/EU], which amends the Accounting Directive [2013/34/EU], into UK law.


The Directive sets out a new set of measures to harmonise the non-financial information that companies need to disclose and broadly reflects the UK narrative reporting framework introduced in October 2013. The provisions of the Directive will apply to a limited number of companies, namely very large listed undertakings. It may also apply to a small number of private companies because of their business as credit institutions or insurers.

The non-financial information relates to environmental, social and employee matters, respect for human rights, anti-corruption and bribery matters. Companies should include relevant policies and their outcomes in their non-financial statement and the main risks arising from those non-financial matters. Member States may allow companies to meet the new reporting requirements either in their annual report or in a separate non-financial statement.

The Directive came into force on December 2014 and Member States have two years to transpose it into national legislation.


The primary aim of the consultation is to ask for views on the regulatory changes necessary to transpose the requirements of the Directive into the UK reporting framework. However, BIS is requesting feedback in particular on the following:

  1. whether the UK should take advantage of the available option under the Directive to allow companies to meet the Directive's non-financial reporting requirements in a separate statement outside the annual report, taking into account the following: (i) the type of information currently required by law that could be placed in a separate report; (ii) the advantages and disadvantages of a separate report; and (iii) the expected impact on companies, investors etc. if a separate report is used;
  2. the different implementation options in terms of which companies should be required to disclose non-financial information, including whether the current UK requirements for quoted companies outside the scope of the Directive should be repealed; and
  3. whether the UK should adopt the option to require the non-financial statement to be verified by an independent assurance services provider and the relative advantages and disadvantages of doing so.  

The consultation paper is also seeking views on a number of topics that fall outside of the UK transposition of the Directive, namely:

  1. whether the UK should allow companies to present the annual report and accounts as an electronic document and what, if any, further protections are required should companies choose this option; and
  2. in the spirit of reducing unnecessary regulations and burdens, whether there are any existing narrative reporting requirements that can be repealed on the basis that they have become redundant, or no longer produce useful disclosure.

Next Steps

Comments are invited by 15 April 2016. The UK must transpose the provisions in the Directive into UK law by 6 December, with a view to applying these regulations to reporting years beginning on or after 1 January 2017.