Interesting article in the UK’s Financial Director about yearend non-financial reporting required by UK companies as part of the EU mandate for 6,000 + public company requirement to report non-financial information to the capital markets and important stakeholders such as investors
This rule is a major CSR/ESG/Sustainability Initiative for Public Company Disclosure
“It’s mandated in just over 100 of those, and there are tens of millions of companies that file in XBRL around the world. (Many of these companies are private companies that involve the preparation of management accountants outside the USA) John Turner sees the biggest uptake of XBRL globally among financial regulators in the banking, insurance and pension industries, particularly in Asia and Europe
Under the new changes in the EU Shareholders Rights Directive -- it will make it easier for shareholders residing in another European Union country to the location of the company in which it invests to participate in the general meetings of those companies and to vote on shareholder issues. The new rules require institutional investors and money management firms to be transparent about how they invest and engage with companies. The directive encourages these investors to adopt a more long-term focus in their investment strategies, and to consider social and environmental issues
US SEC Chair Jay Clayton Urged US Public Companies to Disclosure Human Capital Data on February 6, 2019 : “Today, human capital and intellectual property often represent an essential resource and driver of performance for many companies
With the recent news that the European Securities and Markets Authority (ESMA) has published a feedback statement setting out the use of Inline XBRL as the digital format which public companies in the European Union (EU) must use to report their company information to investors worldwide from January 1, 2020
Managing reputation risk is but one non-financial information item investors are now demanding that companies document in their disclosure process. What are other non-financial disclosure risks (besides reputation risk) investors are asking for companies to disclose? What is non-financial information that companies should disclosed linked to its value that interests investors?
One “constant refrain” heard from investors is that “if a company is not talking about its sustainability strategy and performance, they may conclude the company does not have a story to tell or, even worse, it’s hiding something.” Ceres offers a set of nine recommendations “to guide companies toward more meaningful and effective investor engagement on ESG issues.”
The question is – will the largest capital markets regulator in the world – the United States Securities and Exchange Commission support the disclosure of sustainability data by public companies and create guidance and suggestions of frameworks that can be used to assist US Investors