EU: large companies to be required to report on their social policies

On 21 June, the European Parliament and Council of the EU reached an agreement on a text amending the 2013 directive on financial information that companies with over 250 employees are required to report. The amendment adds “sustainability” information to that companies are obliged to disclose in their financial reports. In terms of social topics, companies will have to report on their progress on working conditions, social dialogue, salaries, equal opportunities for men and women, work-life balance and health and safety. The European Commission will specify, by 31 October 2022, the details of the mandatory data to be published, and independently audited beforehand, by means of delegated acts (similar to decrees). In addition requirements under the directive on sustainability due diligence (see article n°12924), companies will also have to demonstrate transparency on fundamental rights at work, business ethics and their environmental impact in the broad sense. Companies that do not comply will be fined as well as named and shamed. Companies domiciled outside the EU but with a turnover of €150 million or more will also be affected. According to Bruno le Maire, France’s economic affairs minister, the agreement will result in “more readability and simplicity in the information provided by companies”. He adds: “Greenwashing is over. With this text, Europe is at the forefront of the international race to standards, setting high standards in line with our environmental and social ambitions.”