21st August 2017
Tánaiste and Minister for Business, Enterprise and Innovation announces EU regulations requiring non-financial reporting for large companies take effect today
An Tánaiste and Minister for Business, Enterprise and Innovation, Frances Fitzgerald TD, has announced that new EU regulations, which introduce new non-financial reporting requirements for some of Ireland’s largest companies, take effect from today (Monday, 21 August 2017).
Under the European Union (Disclosure of non-financial and diversity Information by certain large undertakings and groups) Regulations 2017, large companies will be required to publish non-financial information about their company policies. The regulations apply to financial years beginning on or after 1 August 2017, so the first of these disclosures are likely to become available from the second half of 2018.
The information published will be on a range of topics, including: greenhouse gas emissions and energy consumption, through to social issues such as engagement with local communities and anti-corruption measures such as whistle blowing procedures. Large listed companies will also be obliged to disclose the diversity policy that applies to their boards of directors.
“These new regulations, which require some of Ireland’s biggest companies to publish information on the policies they adopt and apply on a variety of important matters. In addition, these regulations oblige large listed companies to disclose how they promote diversity, such as age, gender and educational background, on their boards of directors”, the Tánaiste said.
“I believe that public disclosure of this type will help to encourage sustainable growth in Irish enterprise. I expect that it will also be of interest to investors, consumers, non-governmental organisations and wider society.
A flexible approach has been taken in framing these new transparency requirements, which bears in mind the needs of both companies and those who will rely on the new disclosures. For example, the regulations allow companies to choose to publish the required information on their website instead of in an annual directors’ report, which is produced at a set time each year.
For more information contact: firstname.lastname@example.org or 631 2200.
Notes for Editors
The European Union (Disclosure of Non-Financial and Diversity Information by certain large undertakings and groups) (SI No 360 of 2017) were signed into law on 30 July 2017 and come into operation on 21 August 2017. They apply to financial years beginning on or after 1 August 2017.
The Regulations transpose EU Directive 2014/95/EU as regards disclosure of non-financial and diversity information by certain large undertakings and groups into Irish law.
Content of the Regulations
The Regulations provide for two separate reporting requirements.
Firstly, companies that are categorised as both ‘public interest entities’ and ‘large’ and that have more than 500 employees must prepare and publish a ‘non-financial statement’. That statement relates, at a minimum, to environmental, social and employee matters, respect for human rights, and anti-corruption and bribery matters. Where a company does not pursue policies in any of these areas, it must give an explanation as to why not.
A ‘public interest entity’ is an entity, for example, that is a bank, an insurance undertaking, or a company listed on an EU regulated market.
The non-financial statement must be provided either as part of the annual directors’ report or as a separate statement. Where it is provided as a separate statement, it must be filed in the Companies Registration Office with the company’s annual return, or published on the company’s website.
The second reporting obligation is on companies that are listed on an EU regulated market and that are categorised as ‘large’. These companies must provide a description of the diversity policy they apply in respect of their board of directors (referred to as ‘diversity report’). This information forms part of the corporate governance statement that listed companies prepare. The diversity policy addresses factors such as the age, gender, and educational and professional background of directors. Where the company does not have a diversity policy, it must give an explanation as to why not.
The European Commission has published guidelines to give companies guidance on their reporting requirements. These are available at eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX:52017XC0705(01).
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