The FEE Position Paper focusses on the role of practitioners in providing assurance on the requirements of the EU Directive on disclosure of non-financial and diversity information. Member States should have transposed this Directive into their national laws by 6 December 2016.
The Directive requires 6,000 large European companies to disclose information at least on environmental, social, and employee-related matters, as well as on the respect for human rights, anti-corruption, and bribery issues.
The entity must disclose a brief description of its business model and, for each of the above areas, the following information:
• a description of policies, including due diligence processes implemented
• outcomes of these policies
• the risks relating to those areas and how the company manages those risks
• the relevant non-financial key performance indicators
Reporting is mandatory yet flexible as the Directive adopts a ‘report or explain’ approach. An entity that does not pursue policies in one or more of these areas is required to explain why.
As per the Directive, NFI has to be disclosed in the management report or in a report separate to the financial statements.
Moreover, an amendment to the corporate governance requirements of the Directive relating to PIEs also requires the disclosure of the entity’s diversity policy in respect of its administrative, management, and supervisory bodies.
Statutory auditors need to “check” whether these disclosures are actually reported. Member States may also require an independent assurance service provider to “verify” this information.
In this paper, FEE sets out what these provisions mean in practice and how the European accountancy profession can add credibility and trust to the data reported, and serve stakeholders’ needs.
Full press release
Full position paper
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