EC is Moving Ahead on ESG Type Standards

The European Commission (EC) announced in July 2020 that the European Financial Reporting Advisory Group (EFRAG) is to develop recommendations for non-financial reporting standards. It is envisaged that non-financial reporting standards will include elements of what is normally referred to as ESG reporting.

As set out earlier in the year, the EC is taking an in-depth look at non-financial reporting, including reviewing the Non-Financial Reporting Directive (NFRD). Under that directive, large companies have to publish reports on the policies they implement in relation to environmental protection, social responsibility and treatment of employees, respect for human rights, anti-corruption and bribery, and diversity on company boards (in terms of age, gender, educational and professional background).

EFRAG will mobilise a balanced and broad task force, taking into account a wide range of stakeholders and expertise, to prepare technical advice. The recommendations must build on existing standards and frameworks, and will be developed in close association with existing standard setting organisations.

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