Separate reporting of non-financial information rejected

10th November 2016


Related Topics

Related tags

  • Adaptation ,
  • Mitigation ,
  • Reporting ,
  • Business & Industry

Author

Lorne Cousins

Annual reports should contain information on a firm's environment and social impacts and risks, the government has concluded.

In its response to a consultation on transposing the EU Non-Financial Reporting Directive, the Department for Business, Energy and Industrial Strategy (BEIS) has confirmed that it will not require firms to produce separate reports on non-financial issues up to six months after publication of the management report and accounts.

BEIS said the majority of respondents (31 out of 36) to its consultation believed a delay between the publication of the accounts and non-financial information would not be helpful in giving shareholders a holistic picture of the business.

EU member states are required to transpose the rules into national legislation by 6 December 2016 so that companies can adhere to the requirements in their annual reports in 2017. The directive aims to provide investors and stakeholders with a more comprehensive view of a company’s performance by including information on issues such as environmental risk, respect for human rights and anti-corruption and bribery issues.

Many listed UK companies are already reporting non-financial impacts and risks under the Companies Act 2006.

Fergus Moffat, head of public policy at the UK Sustainable Investment and Finance Association, welcomed the decision. Having to produce another report six months after the annual report would not be helpful to investors as information on environment and social issues is financially material, he said.

Michael Zimonyi, policy and external affairs manager at the Climate Disclosure Standards Board, said: ‘We would question the usefulness of the information if the non-financial report was separate.

‘It’s great to see alignment on this topic and that the government has listened,’ he added.

Disclosure obligations apply only to companies with more than 500 employees and which are deemed public interest entities (PIEs). The government’s consultation considered implementing the directive on top of the current UK reporting requirements or simplifying the existing framework by removing reporting obligations on smaller quoted companies outside the scope of the directive.

Many respondents did not like either of these options, according to BEIS. It has decided to permit companies to voluntarily comply with the EU requirements and exempt those that do so from the domestic regulations. This would stop companies having to report under UK rules one year and EU rules the next, for example, if the size of their workforce changed, BEIS said.

The department has also decided not to make third-party auditing of non-financial reports mandatory, believing this would be too costly.

Subscribe

Subscribe to IEMA's newsletters to receive timely articles, expert opinions, event announcements, and much more, directly in your inbox.


Transform articles

Facing the climate emergency challenge in local government

It’s well recognised that the public sector has the opportunity to work towards a national net-zero landscape that goes well beyond improving on its own performance; it can also influence through procurement and can direct through policy.

19th March 2024

Read more

The UK government’s carbon capture, usage and storage (CCUS) strategy is based on optimistic techno-economic assumptions that are now outdated, Carbon Tracker has warned.

13th March 2024

Read more

The UK’s new biodiversity net gain (BNG) requirements could create 15,000 hectares of woodlands, heath, grasslands, and wetlands and absorb 650,000 tonnes of carbon each year.

13th March 2024

Read more

The UK government’s latest Public Attitudes Tracker has found broad support for efforts to tackle climate change, although there are significant concerns that bills will rise.

13th March 2024

Read more

Multinational corporations are undermining their net-zero commitments with excessive air travel and no plans to reduce ‘the low hanging fruit’ of carbon footprints, a study by Transport & Environment has found.

13th March 2024

Read more

The UK government’s climate adaptation plans are ‘inadequate’ and falling ‘far short’ of what is required, the Climate Change Committee (CCC) has warned today.

13th March 2024

Read more

Large businesses across the world are avoiding climate action due to fear they will be called out for getting their work wrong, according to a new Carbon Trust report.

29th February 2024

Read more

A thought-provoking discussion on how storytelling can change the world took place in Central London last night, alongside an exclusive sneak preview of an upcoming IEMA film series.

29th February 2024

Read more

Media enquires

Looking for an expert to speak at an event or comment on an item in the news?

Find an expert

IEMA Cookie Notice

Clicking the ‘Accept all’ button means you are accepting analytics and third-party cookies. Our website uses necessary cookies which are required in order to make our website work. In addition to these, we use analytics and third-party cookies to optimise site functionality and give you the best possible experience. To control which cookies are set, click ‘Settings’. To learn more about cookies, how we use them on our website and how to change your cookie settings please view our cookie policy.

Manage cookie settings

Our use of cookies

You can learn more detailed information in our cookie policy.

Some cookies are essential, but non-essential cookies help us to improve the experience on our site by providing insights into how the site is being used. To maintain privacy management, this relies on cookie identifiers. Resetting or deleting your browser cookies will reset these preferences.

Essential cookies

These are cookies that are required for the operation of our website. They include, for example, cookies that enable you to log into secure areas of our website.

Analytics cookies

These cookies allow us to recognise and count the number of visitors to our website and to see how visitors move around our website when they are using it. This helps us to improve the way our website works.

Advertising cookies

These cookies allow us to tailor advertising to you based on your interests. If you do not accept these cookies, you will still see adverts, but these will be more generic.

Save and close