The importance of disclosing non-financial information
What a company discloses should not be limited to only financial information. CSR reports (Corporate Social Responsibility) are vital for showing that companies are carrying out their activities in a responsible and sustainable way.
Why is it important for companies to report more than just financial information? What is CSR reporting? What does European policy have to say in this regard? These are just some of the questions that every large organization should be asking nowadays. In fact, showing that a company’s activities are carried out in a responsible and sustainable way is either equally, or even more, important than the accounting transparency of any organization.
It is estimated that some 6000 companies (10% relating to Spanish firms) will begin this type of reporting next year following the approval by the European Parliament of the new EU directive on disclosing non-financial information.
” Following the new UE directive, thousands of companies from all over Europe are expected to start CSR reporting in 2018.
Although publishing or externally auditing a Corporate Social Responsibility report is not mandatory in 2017, recent developments at policy level, both nationally and internationally, are speeding up the implementation of the process in standard business practices. Some of these developments are:
-European directive as regards disclosure of non-financial information: to be implemented in 2018 and therefore will cover the financial year 2017. Two clear objectives are set out:
- Identifying risks to sustainability and enhancing investor confidence as well as that of other stakeholders.
- Increase the consistency and comparability of the information disclosed by the rest of the companies.
Such reporting should be done by the following organizations:
- Those of public interest, by which we mean; listed companies that belong to the banking sector, and those covered by national legislation.
- Those employing more than 500 workers.
- Those with a balance sheet exceeding 20 M€ and a turnover greater than 40 M€/ year.
- Those, whose parent company has offices in an EU country and/or is listed in European stock markets.
- Amendments to the Penal Code (Ley Orgánica 1/2015): Criminal responsibility of legal persons. Reveals new regulations which affect administrators’ responsibility.
- New environmental, social and labor considerations under Directive 2014/24/UE with regard to public procurement; Directive 2014/23/UE on concessions referring to a company’s social and environmental characteristics that can be included in the award criteria at the moment of selecting an organization that offers a better quality – price ratio.
- Spanish Strategy in relation to RSE 2014-2020: its goal is to support a public or private organization’s responsible practices with the view to moving towards a more productive, sustainable and integrated society and economy.
” It’s been over 15 years since Abengoa implemented activities that enable a thorough report of its non-financial activities to be made.
Abengoa began to develop actions that allow a thorough and traceable non-financial report to be drawn up over 15 years ago. Today, it has a Corporate Social Responsibility Management System that has the goal of controlling its non-financial information, in order to promote responsible management in the company in such a way that negative impacts are reduced and positive impacts are optimized. This system brings together the non-financial information throughout the organization which facilitates its management and promotes a internal control system that ensures its reliability.