Mandatory environmental reporting proposed for all businesses

MEPs have welcomed a proposal that could see all European businesses required to publish detailed information about their environmental activity

European businesses could soon be required to publish detailed information about their environmental and social footprints, under a proposal approved in January by the European parliament’s legal affairs committee.

The directive, which now awaits approval by the European commission and council, requires companies with more than 500 employees to publish a non-financial statement covering environmental, social and ethical issues as part of their annual reports.

Firms would also be required to detail their efforts to tackle corruption and human rights abuses, and to publish their boardroom diversity policies and demographic information about their current directors.

The proposal, which was approved by MEPs following a co-ordinated campaign by groups including Amnesty International, Friends of the Earth, Save the Children and the Trades Union Congress, would dramatically increase sustainable and ethical business reporting in the EU.

“Companies must be transparent about the huge impacts of their operations on people and the environment”

At present, only around 2,500 of Europe’s 42,000 largest companies formally report on their non-financial impact.

“MEPs have sent a clear and very welcome signal – companies must be transparent about the huge impacts of their operations on people and the environment,” said Friends of the Earth campaigns chief Andrew Pendleton in a statement.

However, Pendleton added that campaigners will have to redouble their efforts in coming weeks to ensure the measure isn’t watered down. Industry groups and some member nations, including the UK, are seeking broad exemptions for non-listed companies, and also want to remove clauses that would require companies to report on the environmental and social impact of their suppliers.

For now, though, MEPs on the legal affairs committee say they’re satisfied that they’ve crafted an effective measure.

The directive “strikes a good balance between the need for increased transparency and the importance of not hampering competitiveness by adding unnecessary red tape,” said Italian MEP Raffaele Baldassarre, the proposal’s main backer.

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