European Union – Non-financial reporting directive, 2014

EU Upcoming

In December 2014, the European Union (EU) adopted Directive 2014/95/EU on disclosure of non-financial and diversity information by certain large undertakings and groups which amends the Accounting Directive 2013/34/EU. The Directive requires public-interest entities (PIEs) in the EU with more than 500 employees to include in their management report a non-financial statement containing information on their policies, main risks and outcomes related to as a minimum: environmental matters, social and employee aspects, respect for human rights, anticorruption and bribery issues. The Directive provides the possibility for Member States to exempt public interest entities from disclosing the required non-financial information in the management report if they have already provided this information in a separate report.

Company in the scope are offered with a list of frameworks to refer to: the Eco-Management and Audit Scheme (EMAS), or international frameworks such as the United Nations (UN) Global Compact, the Guiding Principles on Business and Human Rights implementing the UN ‘Protect, Respect and Remedy’ Framework, the Organisation for Economic Co-operation and Development (OECD) Guidelines for Multinational Enterprises, the International Organisation for Standardisation’s ISO 26000, the International Labour Organisation’s Tripartite Declaration of principles concerning multinational enterprises and social policy, and the Global Reporting Initiative (GRI). PIEs definition under EU law covers listed companies, banks, insurance undertakings and other companies that are so designated by Member States. In that regard, the scope of the Directive varies across the 28 EU Member States. While some Member States have defined PIEs by including only those entities covered by the Directive which are listed companies, banks and insurance undertakings, others have opted to extend the scope and include a broader list of entities such hospitals and even municipalities. In addition the Directive on non-financial reporting stipulates that public interest entities listed on an EU regulated market should provide information on their diversity policy applied to their administrative, supervisory and management bodies.

The European Commission, the initiator of the legislation, has estimated that the new rules will apply to more than 6000 companies across the European Union. The EU Member States have to transpose the new rules stemming from the Directive into national law by December 2016 and we expect the first reports containing the prescribed non-financial information to be prepared for the 2017 financial year. At the moment of the writing of this Report only a few Member States have transposed the Directive into national law and most of the Member State are in the process of drafting legislation bringing in compliance their national laws with the new EU rules. 


General sustainability/ESG/non-financial

Industry sectors covered by the instrument

All/none specified

Organizations covered by the instrument

Type of instrument


Mandatory or voluntary

The geographical scope

International/regional (eg. EU)

Project Partners