Our Corporate Governance and Financial Reporting Expert Groups contributed to our response to the Department of Business, Innovation and Skills’ consultation – The Non-Financial Reporting Directive (EU NFR) – A call for views on effective reporting alongside proposals to implement EU requirements.
We welcomed BIS’s pragmatic and proportionate commitment to having the best structure for narrative reporting while reducing unnecessary regulations and burdens and not wanting to make unwarranted changes.
We noted that companies should have the flexibility to place non-financial information where they feel most appropriate, including within a separate – possibly wholly electronic – report. We suggested that quantitative information on employee gender diversity, certain disclosures regarding employment policies in its directors’ report for companies with more than 250 UK-based employees, as well as information in respect of greenhouse gas emissions could form part of the separate report’s content.
We affirmed our support for the implementation of Option 2 (reduce the scope of the existing UK reporting requirements relating to Non-financial reporting for all quoted companies and limit it to those required by the EU NFR Directive).
We remarked that companies should not be required to have their non-financial statement verified by an independent assurance services provider, highlighting the punitive financial and time burdens for companies.
In response to the consultation questions addressing costs, we presented the results of a survey to our members on the costs incurred on non-financial reporting.