EBF response to the Inception Impact Assessment on the Non-Financial Reporting Directive

27 February 2020

The NFRD should take the form of a Regulation, to ensure harmonization and efficiency. An EU minimum reporting standard on the key data points and KPIs that are necessary to apply the taxonomy and the sustainability disclosures regulation, and more specifically to demonstrate the investment’s environmental impact should be developed.

The EU should open up its databases that collect environmental reporting data and make those re-usable for finance providers. Data should be collected in a central EU repository and made available digitally to ensure that data are widely accessible across MS in an open source format. The EU Commission should put in place or support infrastructures to collect periodically, with the help of new reading technologies, existing climate change mitigation and adaptation data of companies that published non-financial statements under the NFRD and other available relevant information.

Taking into account the new provisions for non-financial reporting under article 4 delta of the Taxonomy regulation, the legal act should:

• Modify the scope in a proportionate way, to add certain categories of companies not currently covered by the NFRD as follows
  • the EU rules on non-financial reporting should apply to all listed companies given the application of the taxonomy to all financial investments in the capital/financial market.
  • companies from sectors with a high transition risk (for example mining, carbon, smaller utilities, …), should also comply with reporting obligations for material risks (e.g. climate only), regardless of the size of the company. Information on climate risk is essential for TCFD reporting as integrated into the EU Non-financial reporting guidelines.
  • A simplified minimum reporting framework or Guidelines could be considered for the remaining companies taking into account materiality, proportionality and possible gradual implementation.
• Specify in more detail what non-financial information companies should report, namely a common minimum set of key performance indicators; these KPIs must be aligned with the list of Taxonomy-compliant activities and products they produce.

Full response on EBF

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