CSR Reporting Under EU Law is Highest for Gender and Lowest for Human Rights Matters, Study Reveals

Source: , 3 June 2019

iPoint is excited to announce the release of a new baseline study which evaluates corporate compliance with the new EU Non-Financial Reporting Directive (NFRD). Funded by iPoint and prepared by Development International (DI), a not-for-profit organization specialized in evaluations, the study systematically assesses the degree of non-financial transparency and ESG (environmental, social, and governance) performance for 2017 and 2018, focusing on companies in Germany, Sweden, and Austria. 

The EU Non-Financial Reporting Directive

The EU NFRD, which is often referred to as Corporate Social Responsibility (CSR) law, has been in force for more than two years. It applies to the current 28 member states of the European Union, and across Europe, some 6,500 companies are affected. With this new directive, public-interest entities in EU member states no longer only report on their financial basics and forward-looking risk discussion. They now also retrospectively account for their non-financial footprint, including adverse impacts they have on the environment and society. Article 1 of the Directive states that the non-financial disclosure must contain information including: “e. non-financial key performance indicators relevant to the particular business” – a point of departure for a new three-country study commissioned by iPoint.

1183 Companies Evaluated on KPIs based on GRI, UN Global Compact, and DNK

The comprehensive study – to date the only one to focus on ESG content in non-financial corporate reports – benchmarks 516 German, 590 Swedish, and 75 Austrian companies, and issues individual transparency scorecards and performance dashboards for them each.
The study applies an ex-post assessment framework premised on more than 60 key performance indicators (KPIs) taken from the reporting frameworks of the Global Reporting Initiative (GRI), UN Global Compact, and the German Sustainability Codex (DNK). This deep-dive into the five required disclosure areas – environmental, social and employee matters, respect for human rights, as well as anti-corruption and bribery matters – reveals the degree to which companies make an effort to demonstrate their environmental and social responsibility.

Top Transparency Scorers

The degree to which companies were found to be transparent was assessed though the application of KPIs, as is required as per the EU Directive as well as the national laws under study. The top five German companies which received the highest transparency scores are:
1.    lighting manufacturer OSRAM Licht AG (transparency score: 30),
2.    pharmaceutical and life sciences company Bayer AG (transparency score: 26),
3.    pharmaceutical, chemical and life sciences company Merck KGaA (transparency score: 25),
4.    luxury fashion house Hugo Boss AG (transparency score: 25), and
5.    chemical distribution company Brentag AG (transparency score: 22).

Topping the transparency list of the evaluated Swedish companies are:
1.    Outdoor power products manufacturer Husqvarna AB (transparency score: 37),
2.    IT-products reseller Dustin Group AB (transparency score: 36),
3.    property company Vasakronan AB (transparency score: 36),
4.    district heating company Stockholm Exergi AB – formerly Fortum Värme Holding samägt med Stockholms stad (transparency score: 34), and
5.    the outdoor and transportation products company Thule Group AB (transparency score: 33).

ESG Transparency Correlated with Performance

The conclusion is mixed: While reporting on gender equality is generally satisfactory, there is often a lack of transparency in other areas, especially with regards to environment- and human rights-related matters. Disclosure on employee and anti-corruption matters lie in between the other mandated reporting areas.

“On the whole, our data show that Swedish companies are a few notches ahead of their German peers”, Dr. Chris Bayer, Principal Investigator of the study, notes. “Yet in each country under study, there are examples of brands making a clear effort to be non-financially transparent. Further, we hypothesize that transparency is correlated with performance, and some – but not all – of companies surveyed use the EU Non-Financial Reporting Directive as an opportunity to show that they deserve a social – and not only a financial – license to operate”, he concludes.

“Behind and in front of the scenes we are witnessing substantial ESG action”, iPoint CEO Joerg Walden observes. “But to what extent are companies willing and able to disclose their non-financial essentials also using established reporting frameworks? Everyone is asking this question, and we can provide answers with this study and iPoint’s solutions.”


The reports for Germany and Sweden can be downloaded from the iPoint website at www.ipoint-systems.com/de/nfrd-report-2018/. The report for Austria will be available in June 2019.Evaluated companies can also request their individual scorecards and performance dashboards with a breakdown of their transparency score as well as the overall, sector-specific and company-specific performance scores, from this website.