20 February 2020. The Commission has today launched a public consultation on the review of the Non-Financial Reporting Directive (NFRD). This Directive requires certain large companies to include a non-financial statement (e.g. on environmental or social issues) as part of their annual public reporting obligations.
Valdis Dombrovskis, Executive Vice-President, said, “Tackling climate change has implications across the board, including on corporate reporting. Our transformation to a carbon-neutral economy means that people need more information from the companies they are investing in. As things stand today, there is currently a sustainability reporting gap that is hampering progress towards a sustainable financial system. The needs of investors for corporate sustainability information are growing faster than any improvements in company reporting. ”
CONSULTATION DOCUMENT: REVIEW OF THE NON-FINANCIAL REPORTING DIRECTIVE
5. DIGITISATION The EU has introduced a structured data standard, the European Single Electronic Format (ESEF) under the Transparency Directive. With effect from 1 January 2020 listed companies in the EU shall report their annual financial reports in XHTML (audited financial statements, management report and issuer’s responsibility statements). Additionally, if the consolidated financial statements are prepared in IFRS, the XHTML document should also be tagged using iXBRL elements specified in the ESEF taxonomy. This allows the information to be machine-readable.