BIS call for views on presentation of non-financial reporting disclosures

The Department for Business, Innovation and Skills has published a call for views on how it should implement EU rules requiring certain large companies to disclose information on environmental, social and employee matters, human rights and anti-corruption and bribery. It also considers if there is scope to refine the regulation of non-financial reporting.

Background

The Non-Financial Reporting Directive (Directive 2014/95/EU) requires large undertakings which are public interest entities with an average number of 500 employees during the financial year to disclose information on environmental, social and employee matters, human rights and anti-corruption and bribery for financial years commencing on or after 1 January 2017. Member States may allow companies to meet the new requirements either in their annual report and accounts or in a separate non-financial statement.

Call for views

Although current UK requirements applicable to quoted companies are similar to the Directive, the Directive has a wider scope, as it also applies to unquoted companies that are public interest entities with over 500 employees.

BIS seeks views on:

  • whether non-financial information required by the Directive and other information could be included in a separate non-financial statement
  • whether to amend the current strategic report requirements so that they only apply to companies within the scope of the Directive (effectively repealing the current requirements for quoted companies with fewer than 500 employees) or whether there should be separate requirements for large public interest entities within scope of the Directive and for quoted companies within scope of the Companies Act 2006 requirements
  • whether the non-financial statement should be verified by an independent assurance service provider

  • the advantages and disadvantages of publishing the non-financial statement electronically via a company's website.

BIS also seeks views on wider reporting reforms

  • whether the definition of senior manager, in Section 414C(9) could be improved (for the purposes of reporting on gender breakdown in the strategic report)

  • whether other reporting regulations could be repealed

  • whether information could be removed from the annual report and published elsewhere, such as on a company's website.

BIS invites comments by 15 April 2016. It is then expected to consult on the form of regulations to implement the Directive. These must be published by 6 December 2016. Other reforms considered in the call for views may be implemented at a later date.

BIS call for views can be found here.