1. A key element of CSR policies is to ensure transparency vis-à-vis the company’s stakeholders. Extra financial reporting contributes to this necessary transparency.
2. The Platform’s members agree unanimously that it is crucial for companies to have an instrument of reporting that is as reliable and pertinent as possible, in order to both facilitate corporate management and the dialogue with investors and civil society.
3. Several EU member states have enacted legislation on this issue in order to provide a referential framework. In France, such a framework was put in place in 2001 with the Nouvelles Régulations Économiques (the NRE Act). , This framework was complemented by article 225 of the Grenelle II act from July 2010.
4. A new breakthrough was made in April 2013 with the European Commission’s proposal for a new accounting directive with the objective of including extra financial information in the annual reports of the majority of companies employing more than 500 people.
The Platform’s members generally embrace this proposal, based on the principle that disclosure of pertinent information would be required, thus providing the companies sufficient scope to take account of their own priorities and particularities. In essence, the text reflects the current policy practiced by large European companies.
The European Parliament has debated and made numerous amendments to the proposal. Meanwhile, The Committee of Permanent Representatives (COREPER) is working on a compromise document.
5. The Platform’s members have stressed the importance they attach to the adoption of a European reporting framework to the European authorities and call on them to find a consensus rapidly, based on a well-balanced directive proposal that meets the expectations of all stakeholders.
This legislative proposal would realise the Commission’s ambition stated in its October 2011 Communication (“A renewed EU strategy 2011-14 for Corporate Social Responsibility”) to substantially increase the number of European companies disclosing information on social and environmental issues.
6. The Platform’s members consider that such a directive would constitute a common framework for European companies, thus increasing transparency and facilitating the comparison of communicated information. It would also send a strong signal to public opinion in Europe and abroad that European companies are willing to progress, strengthening their dialogue with their stakeholders (employees, citizens, clients, consumers, investors, trade unions, suppliers, NGOs, public administrations etc.). In addition, the directive would allow Europe to demand CSR issues to be taken into account by partner countries within the framework of trade negotiations.
7. The directive will complement existing regulation in several EU Member States, notably in France, without imposing further constraints on the companies in these Member States (particularly the fact that companies under defined thresholds are excluded). Nevertheless, Member States that wish to enforce a more ambitious national CSR legislation will retain that possibility.
8. The Platform’s members favour a text that grants sufficient flexibility to companies to take into account their individual characteristics (branch of business, size of the company) notably by applying the “comply or explain” principle, and by letting them choose which CSR reference framework – national, European or international – they wish to use. The Platform’s members also stress that publicly listed companies as well as large unlisted companies should be subject to this regulation.
9. Concerning the content of reporting, the Platform’s members agree that the directive should, as provided by the Commission’s draft, propose the reporting of several types of CSR-related information, in accordance with internationally acknowledged principles, orientations and conventions in the domain of CSR and sustainable development.
Depending on their own characteristics, and in line with the “comply or explain” principle, companies should be invited to disclose their CSR strategy as well as their challenges (in terms of risks and opportunities), impacts, policies, improvement measures undertaken, and the results achieved. For this purpose, they should propose quantitative key indicators that reflect their economic activity and their specific situation (if available, they might refer to a sectoral benchmark).
Moreover, the fact that the EU Commission envisages to elaborate a methodological guide on extra financial reporting is considered very helpful by the Platform. This guide could serve as a reference for all European countries that wish to take measures in this field, as proposed by the European Parliament. The Platform is willing to contribute to this task.
The purpose of reporting extra-financial information on CSR is to help clarify debates and orientations within the company’s management. For this reason, this information should be integrated within their annual report.
