New EU Directive requires large companies to report on their impact on human rights
On 15 April 2014 the European Parliament ratified the Directive on non-financial reporting; the vote in the Council will follow shortly and the final adoption is expected in September or October 2014, after the legal-linguistic verification. Twenty days later it will be published in the Official Journal of the EU and enter into force; Member States will then have 2 years to transpose it into their national legislation.
The new Directive will require large listed companies ("public interest entities" with more than 500 employees) to report annually on principal risks to human rights, and on the environmental and social impacts linked to their operations, relationships, products and services – as well as aspects related to bribery and diversity – and their due diligence procedures for identifying, preventing and mitigating those risks. The reform recognises that such risks must be disclosed regardless of what a company considers being relevant to the interests of its shareholders, as it was required until now. The information shall allow for an understanding of the undertaking’s development, performance and position and of the impact of its activity on society. This legislation is the first step in embedding into EU law the corporate responsibility to respect human rights and the environment as it is expressed in the UN Guiding Principles and OECD Guidelines for Multinational Enterprises.
Read here a comprehensive briefing prepared by Jerome Chaplier (ECCJ) and Filip Gregor (Frank Bold, Frank Bold), including elements from Amnesty International’s public statement, on the new EU Directive on the disclosure of non-financial information, such as their principal risks to human rights and the environmental and social impacts.