The European Parliament, at its final plenary session ahead of elections next month, has overwhelmingly approved a proposal that will see large companies have to disclose more non-financial and diversity information.
The vote caps what had been a tortuous process as the proposal worked its way through the EU legislative mechanism.
The proposal had been shepherded through the Parliament by ‘rapporteur’ Raffaele Baldassarre, the Italian MEP and his UK colleague Richard Howitt, who first proposed the idea over 10 years ago.
“I am proud the final vote on EU company non-financial reporting law I first proposed passes in the European Parliament 599-55,” said Howitt in a tweet.
The Global Reporting Initiative, the sustainability standards body, called it a “new era for non-financial information disclosure in the EU”. It was a “victory for transparency” and a great day for the future of sustainability reporting, said GRI Deputy CEO Teresa Fogelberg.
The comply-or-explain directive will require an estimated 6,000 companies in the EU to report on environmental, social and employee-related, human rights, anti-corruption and bribery matters.“The demand by investors and civil society for greater transparency and accountability of undertakings is growing,” said Baldassarre. “The new rules will enable forward-looking business leaders to address this demand and to fully make use of the huge potential of CSR in order to increase their competitiveness while contributing to smart and sustainable growth in Europe.”
“This directive is the vital catalyst needed to usher in a new era of transparency in the largest economic region in the world,” added the GRI’s Fogelberg.
The final “compromise text” of the directive was thrashed out earlier this year at the regular ‘Coreper’ (Committee of Permanent Representatives) meeting.
Campaign group the European Coalition for Corporate Justice (ECCJ) had warned that some member states (the UK, Germany, Poland and Austria) were seeking to block. Howitt had branded those trying to block the proposal as “dinosaurs”.
Howitt has said how the measure is “no dry, technical debate simply about company law”. Rather it was the way through which many in companies as well as in wider society have chosen to advance the cause of sustainable and socially responsible business. Link