The European Commission has adopted guidelines on the disclosure of environmental and social information. The Commission said they will help companies to disclose relevant non-financial information in a consistent and more comparable manner.

These guidelines have been published as companies prepare to apply the EU's Directive on Non-financial Reporting. The directive entered into force in December 2014 while the deadline for member states to transpose the directive into national legislation was December last year.  The directive applies to certain large companies with more than 500 employees who need to report against it, from 2018, with information relating to the 2017 financial year.

The aim of the directive and these guidelines is to boost corporate transparency and performance, as well as encourage companies to embrace a more sustainable approach. The EU believes that increased transparency will boost the long-term performance of companies and employment as well as enhance trust among stakeholders, including investors and consumers.

Valdis Dombrovskis, Vice-President responsible for Euro and Social Dialogue, Financial Stability, Financial Services and the Capital Market Union, said: “Europe needs to take the lead in making economies greener and more sustainable. This is why we are today proposing flexible guidelines to boost corporate transparency across all sectors. By providing relevant information on their environmental and social credentials, companies are doing themselves a favour and helping their investors, lenders and society at large."

The Commission said that the proposed guidelines reflect current best practices and most recent developments including lessons from the UN Sustainable Development Goals, the Paris Climate Agreement, the industry-led Task Force on climate-related financial disclosures set up by the Financial Stability Board, and the on-going work of the High-Level Group on Sustainable Finance established by the European Commission in the context of the Capital Markets Union initiative.

The guidelines are voluntary and do not extend the scope of current rules. However, all companies preparing a non-financial statement can rely on the guidelines, if they choose to, the Commission said.