Company reporting on climate and human rights following the EU Non-Financial Reporting Directive represent warm words, rather than concrete targets (according to the Alliance for Corporate Transparency’s review of 1,000 reports)

On 17 February, the Alliance for Corporate Transparency (a project initiated by Frank Bold with a range of civil society organisations) released its latest report analysing disclosure of 1,000 companies pursuant to the EU Non-Financial Reporting Directive. The analysis finds that the information provided is falling “far short” of expectations and that:

• Disclosure generally fails to address concrete issues, targets and principal risks, and report outcomes
• Only 14 % of companies report their Boards discussing specific issues in their non-financial report, and only 15 % report a link between sustainability objectives and executive remuneration
• On climate change, only 35 % of companies have targets and only 28 % report on their outcome
• The number of companies reporting specific issues and targets on climate change has reduced
• Companies who chose to give no information at all about the general structure and risks of their supply chain has increased
• Less than 4 % of companies report on measurement of actions to manage human rights risks
• Only 7 % of companies express a commitment to remedy affected workers or communities
• Over 75 % of companies do not provide information about supply chain transparency in their reports, with less than 1 % publicly listing their suppliers (with the exception of apparel)

The findings will feed into discussions at the European Commission level related to updating the directive and the development of the European Non-Financial Reporting Standard, as well as ongoing EU and national legislative discussions.