GRI, provider of the world’s leading standards for sustainability reporting, has expressed full support for the European Commission’s plans to revise the Non-Financial Reporting Directive (NFRD), for which a public consultation closed on 11 June. This process sought views from all stakeholders on how to improve public reporting of sustainability information by companies to underpin the sustainable economy objectives of the EU Green Deal.
The European Commission has wisely committed to a green recovery plan for building back stronger from the COVID-19 pandemic. Corporate transparency on impacts and contributions to these sustainability goals is a cornerstone of this policy and will be implemented by the revisions to the NFRD.
The main points from GRI’s consultation response include:
- The European standards must leverage existing effective frameworks to minimize the burden on reporting companies. The GRI Standards are used by the majority of reporting companies in Europe. GRI stands ready to apply its global expertise in sustainability reporting and standard setting to the EU process – and is willing to work closely with the Commission and other stakeholders (including other relevant standard setters) to ensure the outcome fits with global best practice for sustainability reporting.
- ‘Double materiality’ must be the foundational concept behind the EU non-financial reporting requirements. This means that companies identify, manage and report on both the sustainability issues that affect their own finances and those that impact society. The GRI Standards is the only sustainability disclosure standard that embodies this concept and provides a solid foundation on which to build the Commission’s objective.
- GRI recognizes the shortcomings in the implementation of the current NFRD. Under the revised directive, GRI calls for more reliable, complete and comparable disclosures. Only with an improved NFRD can all stakeholders in the EU rely on this information and use it toward the goal of advancing a sustainable economy.
Tim Mohin, GRI chief executive, said: “Aligning capital to sustainable business practices is at the heart of the EU’s Green Deal. The European Commission has recognized that comprehensive and reliable sustainability reporting by companies is the foundation for a sustainable economy. The process ahead of us, leading to the timely adoption of a much-improved EU disclosure system, will be intense and requires collaboration with established standard setters. GRI looks forward to cooperating with all stakeholders to reach a European solution with a global reach.”
Eric Hespenheide, chair of the GRI board, said: “For more than 20 years GRI has provided leadership to help organizations understand and take accountability for their impacts – not just inwardly on the corporate bottom line, but also outwardly on the environment and society. Over that period, we have continued to evolve and grow, working with all stakeholders to achieve this aim. We are excited to continue the journey with partners in the EU.”
Judy Kuszewski, chair of the Global Sustainability Standards Board, the independent body within GRI’s governance responsible for setting the GRI Standards, added: “The multi-stakeholder development process of the GRI Standards ensures that our standard setting is independent, robust and founded in the public interest. I believe these foundations strongly align with the European Commission’s aspiration for non-financial reporting. I am confident that by working with the Commission and other stakeholders we can enable the effective reporting needed to unlock the benefits of corporate transparency – in Europe and further afield.”
Download (pdf) the full the response from GRI to the European Commission’s consultation on the revision of the Non-Financial Reporting Directive. The NFRD currently applies to companies with over 500 employees within the EU, requiring them to include a non-financial statement as part of their public reporting obligations.