EFRAG invited to provide recommendatoins on possible EU Non-Financial Reporting Standards

Jul 07, 2020

 

The European Financial Reporting Group (EFRAG) is to begin preparatory work on the development of possible EU non-financial reporting standards in a revised non-financial reporting directive (NFRD) following the European Commission’s decision in May to revise the NFRD in the first quarter of next year. 

The preparatory work will be carried out by a multi-stakeholder Project Task Force (PTF). The PTF will be appointed by the Steering Group of the European Reporting Lab @ EFRAG (European Lab) and will be required to take into account at least the four non-financial matters currently covered by the NFRD

  • environment;
  • social and employee matters;
  • human rights;
  • bribery and corruption

and the key categories of information

  • business model;
  • policies including due diligence processes;
  • outcomes;
  • principal risks and risk management;
  • Key Performance Indicators.

The PTF will also consider how to improve narrative reporting about intangible factors, including in relation to human capital and workforce skills.

The work is expected to be completed in early 2021, with a progress report to be released at the end of October 2020.  A call for candidates for this project task force will be issued shortly.

In addition, Executive Vice President Valdis Dombrovskis has invited EFRAG Board President and European Lab Steering Group Chairman Jean Paul Gauzès to consider the possible need for changes to the governance and financing of EFRAG in the context of the possible development of European non-financial reporting standards.

Guazès described the mandate as an "important first step towards possibly developing European non-financial reporting standards".