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Company Reporting
IFRS Financial Statements
The EU decided in 2002 to adopt a regulation to apply IFRS in the EU to certain financial statements "The IAS Regulation".
From 1 January 2005 International Financial Reporting Standards (IFRS) apply for the consolidated financial statements of listed companies in the EU.
IFRS are adopted by the EU in the form of regulations, which are published in the Official Journal of the European Union. Regulations are directly applicable in all Member States.
Non IFRS Financial Statements
Accounting Directive 2013/34/EU. With the Accounting Directive, Member States are given direction on the reporting by such companies.
The Directive addresses the presentation and content of the annual or consolidated financial statements, of the management reports, of the measurement bases used and of publication. With this shared set of principles, non-IFRS financial statements in the EU are not only of high quality, but also comparable to a great extent.
Reporting by undertakings with listed scurities
Public Country By Country Reporting and Corporate tax transparency
With the rules on country-by-country reporting, the EU has created a framework where businesses in the extractive and logging industries have to publish their payments to governments relating to the exploitation of natural resources. This will assist populations of resource-rich countries to hold their governments accountable for these proceeds.
In addition, a country-by-country reporting is also required from EU credit institutions (banks). This will ensure that trust in the financial sector is regained. On 12 April 2016, the Commission adopted a proposal for a Directive which imposes on EU and non-EU multinational groups the publication of a yearly report on the profit and tax paid and other information.
NON FINANCIAL REPORTING
Directive 2014/95/EU
Large public-interest entities (listed companies, banks, insurance undertakings and other companies that are so designated by Member States) with more than 500 employees should disclose in their management report relevant and useful information on their policies, main risks and outcomes relating to at least
- environmental matters,
- social and employee aspects,
- respect for human rights,
- anticorruption and bribery issues, and
- diversity in their board of directors.
There is significant flexibility for companies to disclose relevant information (including reporting in a separate report), as well as they may rely on international, European or national guidelines
Guidelines on reporting climate-related information
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Climate Related info
Communication from the Commission - Guidelines on non-financial reporting: Supplement on reporting climate-related information C/2019/4490
https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX:52019XC0620(01)
Reporting climate related info
Summary of the EC guidelines on reporting climate-related information
https://ec.europa.eu/info/files/190618-climate-related-information-reporting-guidelines-overview_en
Commission's action plan on financing for sustainable growth
The guidelines on reporting climate-related information are a deliverable of the Commission's action plan on financing for sustainable growth (https://ec.europa.eu/info/publications/sustainable-finance-renewed-strategy_en) published in March 2018 and build on the recommendations of the technical expert group on sustainable finance (TEG) (https://ec.europa.eu/info/publications/sustainable-finance-technical-expert-group_en) .
The TEG published its report on climate-related disclosures (https://ec.europa.eu/info/publications/190110-sustainable-finance-teg-report-climate-related-disclosures_en) in January 2019 and invited stakeholders for feedback. Approximately 70 organisations and individuals submitted comments. The TEG published a summary of these comments (https://ec.europa.eu/info/files/190110-sustainable-finance-teg-report-climate-related-disclosures-summary-of-responses_en) .
The Commission took into account the TEG report and the feedback received from stakeholders on that report and consulted stakeholders on the update of the guidelines before their adoption in June 2019 (https://ec.europa.eu/info/consultations/finance-2019-non-financial-reporting-guidelines_en). The Commission published a summary of the written comments (https://ec.europa.eu/info/files/2019-non-financial-reporting-guidelines-feedback-statement_en) provided by stakeholders on its consultation document.
More information:
- Targeted consultation on the update of the non-binding guidelines on non-financial reporting (https://ec.europa.eu/info/consultations/finance-2019-non-financial-reporting-guidelines_en)
- Factsheet: Financing sustainable growth (https://ec.europa.eu/info/files/190618-sustainable-finance-factsheet_en)
Proposal for a Corporate Sustainability Reporting Directive (CSRD)
On 21 April 2021, the Commission adopted a proposal (https://ec.europa.eu/info/publications/210421-sustainable-finance-communication_en#csrd) for a Corporate Sustainability Reporting Directive (CSRD), which would amend the existing reporting requirements of the NFRD. The proposal
- extends the scope to all large companies and all companies listed on regulated markets (except listed micro-enterprises)
- requires the audit (assurance) of reported information
- introduces more detailed reporting requirements, and a requirement to report according to mandatory EU sustainability reporting standards
- requires companies to digitally 'tag' the reported information, so it is machine readable and feeds into the European single access point envisaged in the capital markets union action plan (https://ec.europa.eu/info/business-economy-euro/growth-and-investment/capital-markets-union/capital-markets-union-2020-action-plan_en)
EU sustainability reporting standards
The Commission's proposal for a Corporate Sustainability Reporting Directive (CSRD) envisages the adoption of EU sustainability reporting standards. The draft standards would be developed by the European Financial Reporting Advisory Group (EFRAG) (https://efrag.org/) .
The standards will be tailored to EU policies, while building on and contributing to international standardisation initiatives.
The first set of standards would be adopted by October 2022.
- See the EFRAG reports on development of EU sustainability reporting standards ( https://ec.europa.eu/info/publications/210308-efrag-reports_en)