SOFT&GREEN Insights

Reporting, a requirement for many companies

For years now, a number of companies have voluntarily decided to accompany their financial statements with a set of other non-financial information. Thus were social statements born, in addition to environmental reports and in some cases Integrated Reports.
For some large companies today, this choice is no longer voluntary: Italian Legislative Decree 254/2016 entered into force in January 2017 to implement Directive 2014/95/EU of the European Parliament concerning the obligation to disclose non-financial and diversity information.

Which companies will be involved?
The Decree affects large companies with more than 500 employees and a balance sheet of over 20 million euros, or total net revenue from the sale of goods and services equal to or greater than 40 million euros.

What are the objectives of the Directive?
The new Directive aims to introduce and reinforce virtuous behaviour, increase transparency in the disclosure of non-financial information and increase the confidence of investors and stakeholders in general.

What reporting will be required?
Reporting areas will relate to environmental, social and personnel aspects, respect for human rights and the fight against corruption. The reporting document must include a brief description of the corporate model, a description of the policies applied by the company in relation to these aspects, the result of these policies, the main risks related to them and the fundamental indicators of non-financial performance which specifically relate to the company’s activities.

What information is important?
The information subject to disclosure can be contained in the annual report or in another document such as the Sustainability or Environmental Report, etc.
The non-financial information must include the following topics:

  • use of renewable and non-renewable energy sources and water resources
  • greenhouse gas emissions and other polluting emissions into the atmosphere
  • impact of corporate policies in the short and medium-term in relation to the environment, health and safety
  • social aspects and those connected to personnel management
  • respect for human rights
  • methods for fighting both active and passive corruption.

The non-financial reporting must be reviewed by an independent party.