Corporate Social Responsibility (CSR) and the European Union: Directive 2014/95/EU
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EU Directive: Large Companies must report non-financial information
The directive requires large companies to disclose relevant non-financial information to provide investors and other stakeholders with a more complete picture of their development, performance and position and of the impact of their activity.
Specifically, large companies must give a review of policies, principal risks, and outcomes, including on:
• environmental matters; • social and employee aspects; • respect for human rights; • anti-corruption and bribery issues; • diversity on boards of directors.
EU member states must incorporate in their national law by the 6 December 2016 the Directive 2014/95/EU.
Definition of companies that must report
The directive defines as large companies those that have 500+ employees operating in the EU and are public interest entities (PIEs).
The most recent definition of public-interest entities (PIEs) in the European Union is included in Article 2 point 13 of Directive 2014/56/EU1 and is as follows: ‘Public-interest entities’ means:
(a) Entities governed by the law of a Member State whose transferable securities are admitted to trading on a regulated market of any Member State within the meaning of point 14 of Article 4(1) of Directive 2004/39/EC; (b) Credit institutions as defined in point 1 of Article 43(1) of Directive 2013/36/EU of the European Parliament and of the Council, other than those referred to in Article 2 of that Directive; (c) Insurance undertakings within the meaning of Article 2(1) of Directive 91/674/EEC or; (d) Designated by the Member States as public-interest entities, for instance, undertakings that are of significant public relevance because of the nature of their business, their size or the number of their employees.
EU Directive guidelines
Companies are given the freedom to disclose this information in the way they find useful or in a separate report. In preparing their statements, companies may use national, European or international guidelines such as the UN Global Compact. It is important to note that in a Memorandum of Understanding between the UN Global Compact and the Global Reporting Initiative (24 June 2010) the UN Global Compact adopts the GRI sustainability reporting guidelines as the recommended reporting language for companies to communicate progress.
About the Global Reporting Initiative
GRI is a non-profit organization working in the public interest towards a vision of a sustainable global economy. GRI supports and guides businesses, governments and other organizations in perceiving, understanding and communicating the impact of business on major, critical sustainability issues. Issues such as climate change, human rights, corruption, and many others.
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