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The new legislation introduces additional non-financial disclosure requirements for large public interest entities to include a non-financial statement in their management report containing information on:
- Environmental matters,
- Social and employee-related aspects,
- Respect for human rights,
- Anti-corruption and bribery issues.
The Statement should include:
(a) a brief description of the undertaking’s business model,
(b) a description of policies, including due diligence processes implemented,
(c) outcomes of these policies,
(d) the risks relating to those areas and how the company manages those risks and
(e) non-financial key performance indicators relevant to the particular business.
In making these disclosures, undertakings may rely on national, EU-based or international frameworks, such as the UN Global Compact, the Guiding Principles on Business and Human Rights implementing the UN “Protect, Respect and Remedy” Framework, the OECD Guidelines for Multinational Enterprises, ISO 26000, the ILO Tripartite Declaration of principles concerning multinational enterprises and social policy, the Global Reporting Initiative, or other recognised international frameworks. Undertakings will need to specify which framework was used for such reporting.
The Directive adopts a “report or explain” approach - an undertaking forgoing policies in one or more of these areas is required to explain why.
The legislation will require large listed undertakings to disclose their diversity policies in relation to the administrative, management and supervisory bodies, including information on the age, gender and educational and professional backgrounds of their members. This should be included in the corporate governance statement and will have to contain the objectives of such a policy, its implementation and the results obtained.
If no such policy is applied, the corporate governance statement should contain an explanation as to why this is the case.
The statutory auditor or audit firm shall check that the required information has been provided.