Environmental matters

A company is expected to disclose relevant information on the actual and potential impacts of its operations on the environment, and, on how current and foreseeable environmental matters may have significant implications for its development, performance, position or impact.

This may include where appropriate material disclosures on pollution prevention and control, environmental impact from energy use, direct and indirect atmospheric emissions (includes greenhouse gas emissions, emissions of toxic substances, emissions of eutrophying and acidifying substances)  protection of biodiversity and water resources (including disclosure related to biotic and abiotic resources, use of land and freshwate) waste management, environmental impacts from transportation or from the use and disposal of products and services, development of green products and services.

For example, the Commission Recommendation 179/2013 includes in its Annexes the Product Environmental Footprint (PEF) and Organisation Environmental Footprint (OEF) methods. These are life cycle assessment methods that enable companies to identify for each product or entire organisation (i) the most relevant impacts and (ii) their contributing processes and emissions along the supply chain. The environmental impacts can be reported separately (the method covers 15 different impact categories including climate change, water depletion, land use, etc) or as a single aggregated score.

Companies are expected to refer, where appropriate, to relevant information on existing environmental reporting requirement {as obligation deriving from EU Directives (Industrial Emissions Directive, Emissions Trading System, Water Framework Directive, REACH, Landfill Directive, End-of-Life Vehicles Directive, Waste Electrical and Electronic Equipment and Restriction of Hazardous Substances Directives, EPRTR, etc.)}.

A company may consider key performance indicators such as:

• Energy consumption from non-renewable sources and energy intensity;
• Greenhouse gas emissions in metric tons of CO2 equivalent and GHG intensity;
• Emissions of other pollutants (measured in absolute value and as intensity);
• Extraction natural resources
• Biodiversity impacts of its activities
• Waste management (e.g. recycling rates).

Social and employee matters

Companies are expected to disclose relevant factors as regards social and employee matters, including the implementation of fundamental conventions of the International Labour Organisation and, as appropriate, diversity issues, such as gender diversity and equal treatment in employment and occupation (including age, gender, sexual orientation, religion, disability and other relevant aspects); employment issues, including employee consultation and/or participation, employment and working conditions; trade union relationships, including respect of trade union rights; human capital management including management of restructuring, career management and employability, remuneration system, training; health and safety at work; consumer relations, including consumer satisfaction, material information relating to products with possible effects on consumers' health and safety; responsible marketing and research; community relations, including social and economic development in the communities.

Companies are expected to rely on appropriate frameworks, for instance on the OECD Guidelines for multinational enterprises, and on the ILO Tripartite Declaration of Principles concerning Multinational Enterprises and Social Policy.

A company may consider key performance indicators based on aspects such as:

• Gender diversity or other aspects of diversity;
• Employees entitled to parental leave, by gender;
• Workers who participate in activities with high risk of specific accidents or diseases;
• Number of occupational accidents, types of injury or occupational diseases;
• Employee turnover;
  
• Ratio of employees working under temporary contracts; 
• Average hour of training per year per employee; 
• Employee consultation processes;
  

Supply chain aspects

Companies, where relevant and proportionate, are expected to disclose material information on supply chain matters that may have significant implications for their development, performance, position or impact. This would include information necessary for a general understanding of a company's supply chain, as well as how relevant non-financial aspects are considered in the supply chain management.

When companies consider that disclosing detailed information about impending developments or matters in the course of negotiation would be seriously prejudicial, they may meet the overall transparency objective by disclosing summarised information that is not seriously prejudicial.

Companies are expected to rely on the OECD Guidelines for Multinational Companies as well as, as appropriate, on relevant industry-specific frameworks, such as, among others, the FAO-OECD Guidance for Responsible Agricultural Supply Chains.

A company may consider key performance indicators based on aspects such as:

• Suppliers that are monitored using labour practices criteria;
• Monitoring of suppliers considered to be exposed to high risks of incidents of child labour or of forced labour. 
  

Respect for human rights 

Companies are expected to disclose material information relating to potential and actual impacts of their decisions and activities on right-holders.

It is considered best practice that the company expresses its commitment to respect human rights. Such commitment may define what the company expects from its personnel, business partners in relation to human rights. The information may explain whose rights the commitment addresses, such as employees, including those working under temporary contracts, children, indigenous communities, smallholder farmers, workers in the supply chains, migrant workers and their families or other.

It is considered best practice that companies disclose how they prevent human rights abuses, including their contracts with businesses in its supply chain contain appropriate terms regarding human rights, how they mitigate potential impacts related to human rights and provide adequate remedy in case of human rights violations.

Companies are expected to rely appropriately on the Guiding Principles on Business and Human Rights implementing the UN 'Protect, Respect and Remedy' Framework, the OECD Guidelines for multinational company, ILO Tripartite Declaration of Principles concerning Multinational Enterprises and Social Policy.

A company may consider key performance indicators such as:

• Occurrences of severe impacts on human rights deriving from the company's activities or decisions;
• Specific disclosures on how the company receives, handles and addresses complaints and provides remedies to human rights violations, including how many times remedies had been provided;
• Operations and suppliers at significant risk of human rights violations;
• Specific preventive actions as regards forced or compulsory labour and child labour in certain geographic areas of the company's activity with high risk of exposure to abuse,
• Engagement actions with relevant stakeholders with a view to prevent forced or compulsory labour and child labour.

Anti-corruption and bribery matters

Companies are expected to disclose material disclosures relating to how they manage anti-corruption and bribery matters, and occurrences.

Companies may consider, among others, relevant disclosures relating to policies, organisation, decisions, management instruments, allocation of resources to fight corruption and bribery.

Companies may also consider explaining how they assess fighting corruption and bribery, take action to prevent or mitigate adverse impacts, monitor effectiveness, and communicate on the matter internally and externally.

Companies are expected to rely appropriately the OECD Guidelines for multinational companies.

A company may consider key performance indicators based on aspects such as:

• Internal control processes and resources dedicated to avoid corruption and bribery;
• Employees having received appropriate training;
• Use of whistleblowing mechanisms.