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EU Legislation Requires Companies to Disclose Environmental Risks

Dec 16th, 2016 |

On the basis of the 2017 financial uear European Union Non-Financial Reporting Directive will require European companies to include information on environmental performance in their 2018 financial reporting. Under the Directive, Public Interest entities (PIE) with greater than 500 employees will need to disclose certain social and environmental information. EU Member States were required to transpose the Directive, which regulates companies to be transparent on their sustainability risks and to reassure investors and consumers of a company’s performance, into national legislation by 6 December 2016. In 2016, in its third year of implementation, the CDP Water Report grew to include 1,412 respondents and represent US$67 trillion in assets investment, another signal of this trend towards sustainability disclosure, with water at the forefront.

In terms of environment, EU NFRD requires companies reports to describe their business model and environmental-related policies and outcomes, key environmental risks and impacts related to business’ operations, products or services and how they are managed, as well as environmental KPIs. Sites who have demonstrated compliance with major EWS indicators have also clearly completed these steps and can be used for reporting under the new Directive. The Commission is preparing non-binding guidelines on the methodology for reporting non-financial information for publication by early Spring 2017.

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