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According to the Action Plan: “Corporate reporting on sustainability issues enables investors and stakeholders to assess companies' long-term value creation and their sustainability risk exposure. Since 2018, the EU Directive on the disclosure of Non-Financial Information (NFI) requires large public interest entities to disclose material information on key environmental, social and governance aspects and how risks stemming from them are managed. The Directive allows companies to report sustainability information in a flexible manner. Going forward, an appropriate balance needs to be struck between flexibility and the standardisation of disclosure necessary to generate the data needed for investment decisions. In terms of disclosure by the financial sector, there is merit in enhancing transparency of asset managers and institutional investors, including the way in which they consider sustainability risks and their exposures to climate-related risks.
There are also growing concerns that the current accounting rules are not conducive to sustainable investment decision-making. In particular, the European Parliament's resolution on IFRS 9, adopted on 6 October 2016, raised concerns about the impact the new accounting standard on financial instruments (IFRS 9) might have on long-term investments. The Commission recognises the importance of ensuring that accounting standards do not directly or indirectly discourage sustainable and long-term investments. In this regard, consideration is needed about whether there could be more flexibility as concerns the endorsement of IFRSs wherever specific adjustments would be more conducive to long-term investment.“
Action Plan: Financing Sustainable Growth
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