23 June 2020

IFAC Response to the European Commission’s Non-Financial Reporting Directive Review

IFAC continues to speak out on behalf of the global accounting profession on the topic of non-financial reporting, most recently in response to the European Commission’s review of the Non-Financial Reporting Directive (NFRD).

IFAC urges the Commission to adopt a global mindset by engaging input from a broad range of international stakeholders in determining the best way forward.  Steps taken must “fit within” a global system and avoid regional regulatory fragmentation.

Non-financial reporting answers the call from investors and other providers of capital for better, broader information about company performance and prospects for value creation, while also helping identify opportunities to support sustainable—and less carbon-reliant—business models. In the post-COVID world, corporate reporting that reflects the needs of a broad range of stakeholders will be particularly important to communicate on an organization’s performance and priorities.   

As a Network Partner of the B20, IFAC calls on global bodies—including the G20—to encourage policy-makers, standard-setters, and regulators to facilitate harmonization towards a globally-acceptable approach to reporting ESG metrics and disclosures.

IFAC supports reporting requirements that address both societal and company performance impacts and that anticipate the needs of specific markets. Any jurisdiction-specific reporting requirements need to conform with metrics and disclosures that are part of a globally accepted system so that comparability is achieved. 

The accountancy profession is critical to evidence-based decision making, reliable information gathering, and consistent, comparable corporate reporting. Active engagement by the profession on this topic will maximize the benefits of a global solution to non-financial reporting that best serves shareholders and the broader public interest.

As the global voice of the accounting profession, IFAC remains committed to advocating for a comprehensive approach to non-financial reporting through its contributions to global consultations and engagements.

A summary of IFAC’s response is available on its website.

IFAC

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