Non-financial disclosures demands for EU firms

28th February 2014

MGI World Non-financial disclosures demands for EU firms

Greater demands are to be put on some European firms to make more non-financial disclosures, after an agreement was reached on the subject among MEPs.

An amendment to existing accounting legislation will be introduced that will improve transparency among certain large companies on social, environmental and diversity matters.

It will mean much greater efforts will be needed to ensure compliance with European Union accounting rules. The changes will cover the environment, social and employee-related matters, human rights, anti-corruption and bribery, and diversity on boards of directors.

“Companies, investors and society at large will benefit from increased transparency,” said Michel Barnier, commissioner for the Internal Market and Services.

The amendments will affect companies with more than 500 employees, thought to be amount to roughly 6,000 across the EU, though the move raises the prospect of similar requirements gradually being placed on smaller companies.

However, Mr Barnier was keen to play down any suggestion that smaller companies could eventually be caught up in the legislation.

“The new rules will only apply to some large companies with more than 500 employees, as the costs for requiring small and medium-sized enterprises (SMEs) to apply them could outweigh the benefits," he said.

Meanwhile, he said that while the European Commission has to report back on country-by-country reporting on tax matters by 2018, he was “sorry that the spirit of the European Council conclusions will not be taken forward as quickly as I had hoped”.

According to the release from the EC, the reporting rules leave “significant flexibility” for companies to disclose relevant information how they would like to, such as in a separate report or as part of their annual financial results.

Companies will be able to use international, European or national guidelines which they consider appropriate, including the UN Global Compact, ISO 26000, or the German Sustainability Code, the EC said.

Read more on Industry news

MGI World Ghana and Kenya flags with text under

Changes in legislation impact the accounting industry in Ghana and Kenya

8th June 2021

In the latest edition of the International Accounting Bulletin (IAB), member firms MGI O.A.K...

MGI World Map of australia with flag detail and text

Sydney-based CPAAI member firm, Accru Felsers, gives a quick round-up of the Australia Federal Budget 2021

24th May 2021

Five months later than originally planned, as a result of the COVID-19 pandemic, Australian...

MGI World Lead image of black and white map of middle east with Turkey and UAE overlay text

How are economies faring after a challenging year? Hear from our members in Turkey and UAE as they talk of the effects of government stimulus and regulatory changes

6th May 2021

In the latest edition of the International Accounting Bulletin (IAB), Veysel Ekmen and Özcan Aksu,...