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The Non-Financial Reporting Directive – NFRD – (Directive 2014/95/EU) is an amendment to the Accounting Directive (Directive 2013/34/EU). The NFRD identifies four sustainability issues (environment, social and employee issues, human rights, and bribery and corruption) and with respect to those issues it requires companies to disclose information about their business model, policies (including implemented due diligence processes), outcomes, risks and risk management, and KPIs relevant to the business. The NFRD requires companies to not only how sustainability issues may affect the company, but also how the company affects society and the environment.
The non-financial information currently disclosed by companies does not adequately meet the needs of the intended users. As part of the European Green Deal, the Commission committed to review the NFRD to strengthen the foundations to scale up sustainable finance by improving transparency and to embed sustainability more precisely into the corporate governance framework, as many companies still focus too much on short-term financial performance compared to their long-term development and appropriate management of environmental risks and mitigation opportunities.
Rethink Plastic Alliance responded to this consultation proposing reforms that would help improve the disclosure and mitigation of environmental impacts and business risks by companies with a large plastic footprint and investors in those companies.