On 8 June 2020, the Autoriteit Financiële Markten (AFM) published its answer to the consultation of the European Commission for the revision of the Non-Financial Reporting Directive.
16 Jul 2020
The AFM wants an international standard for non-financial information in reporting. Such a standard is necessary to increase the comparability, consistency, relevance and reliability of this information.
The Non-Financial Reporting Directive (NFRD) requires that large public interest entities (PIE), such as securities issuers, banks and insurers, include a statement on non-financial information either in their management report, such as in the Netherlands, or in a separate publication. In it, they report on environmental, social and human resources issues, respect for human rights and the fight against corruption and bribery.
Clear and unambiguous regulations are required
In its response to the consultation, the AFM argues for the need for a uniform reporting standard for the inclusion of non-financial information. Due to the lack of clear and unambiguous regulations, this information is not always comparable, consistent, relevant and reliable. The AFM advocates an international (above a European) standard and a coherence of the revised directive with other applicable European legislation.
All relevant information about organization together
The NFRD requires large securities issuers and financial companies to be transparent about sustainability factors in their business activities. The AFM is in favor of integrated reporting, in which all relevant financial and non-financial information about an organization is presented together. In its response to the consultation, the AFM therefore advocates including non-financial information in the management report of a company and imposing these obligations on large non-PIE and medium-sized PIEs.
This article was originally published in the June edition of REGWATCH. Read the full edition covering the following jurisdictions:
- European Union
- Hong Kong
- United Kingdom