Sustainable Finance: Commission launches public consultation on the review of the Non-Financial Reporting Directive

The Commission has today launched a public consultation on the review of the Non-Financial Reporting Directive (NFRD). This Directive requires certain large companies to include a non-financial statement (e.g. on environmental or social issues) as part of their annual public reporting obligations. The main focus of this consultation is to collect views from across the EU on different possible reforms or improvements that could be made to the Directive. As set out in the European Green Deal Communication and the European Green Deal Investment Plan, the European Commission has committed to reviewing the NFRD in 2020 as part of its strategy to strengthen sustainable investment in Europe. Meeting the objectives of the European Green Deal will require additional investments across all sectors of the economy, the bulk of which will need to come from the private sector. Reviewing this Directive is, therefore, an essentialpart of the Commission’s effort to scale up sustainable finance by improving corporate transparency and providing all stakeholders with more comparable and relevant information on sustainable business activities.Valdis Dombrovskis, Executive Vice-President for an Economy that Works for Peoplesaid, “Tackling climate change has implications across the board, including on corporate reporting. Our transformation to a carbon-neutral economy means that people need more information from the companies they are investing in. As things stand today, there is currently a sustainability reporting gap that is hampering progress towards a sustainable financial system. The needs of investors for corporate sustainability information are growing faster than any improvements in company reporting. So we welcome all views on how best to improve this Directive. ” The feedback from the public consultation will feed into the Commission’s impact assessment on the review of the Directive. Respondents are encouraged to provide as much evidence as possible (see here). The consultation will remain open until 28 April 2020.Read Executive Vice-President Dombrovskis’ speech on financial reporting at the IFRS Foundation Conference on Tuesday 18 February.