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From 2017 large companies across Europe will have to include their impact on the environment, society and human rights in their annual company report.
The landmark vote by the European Parliament was welcomed by Richard Howitt MEP: “All the evidence suggests that transparency is the best way to change business behaviour. This European law will prevent corporate scandals and make a leap in the transition towards a sustainable, low-carbon economy for the future.
"By requiring the information to be included in the management statement and enabling international frameworks to be used to satisfy the law, Europe is sending a strong signal to the rest of the world advancing the global move towards integrated reporting.”
Howitt, who first proposed the legal change, commented that the exemption for small businesses meant that the new law had “the best chance of being genuinely implemented”.
The move was also welcomed by Global Reporting Initiative (GRI).
“This vote is a victory for transparency and this is a great day for the future of sustainability reporting,” said Teresa Fogelberg, Deputy Chief Executive, Global Reporting Initiative (GRI). “This agreement demonstrates the EU’s strong commitment to corporate transparency and sustainability – supporting smart, sustainable and inclusive growth, and paving the way for a sustainable global economy.”
However, Eurosif (the European Sustainable and Responsible Investment Forum) sounded a note of caution.
François Passant, executive director of Eurosif, expressed disappointment that the legislation does not go far enough: “While the text of the legislation is probably the best compromise that could be reached at this stage, it falls short in a number of areas important to sustainable and responsible investors, most notably scope and assurance. Eurosif will therefore continue to engage with policy-makers on these and work with other market forces to progress reporting practices.”
Picture credit: © Svidenovic | Dreamstime.com
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