Share this post
European Directive 2014/95/UE of the European Parliament and of the Council, of 22nd October 2014, which modified Directive 2013/34/UE, imposed the obligation to divulge non-financial information and information regarding diversity upon certain large companies and groups of companies. The objective of this modification was to “identify the risks to improve sustainability and increase investor, consumer and company confidence in general”.
In this way, the contents of the annual corporate governance report was extended to include the following:
- The disclosure of diversity policies in relation to age, sex, disability, training and professional experience.
- The disclosure of non-financial information or information related to corporate social responsibility regarding social and environmental issues, staff, human rights and the fight against corruption.
This last point must also include information regarding due diligence procedures applied by the company or in supply chains or subcontracting (if necessary), and likewise measures taken to identify, evaluate, verify and control the risks, as well the adoption of the measures.
When facilitating the above information, companies must draw on the following:
- National frameworks.
- European Union frameworks, such as the Eco-Management and Audit Scheme (EMAS)
- International frameworks, such as:
a.The United Nations Global Agreement on Governing Principles of companies and human rights.
b.The Guiding Principles of the Organisation for Economic Co-operation and Development (OECD) for multinational companies.
c.The ISO Standard 26000 of the International Organisation for Standardisation.
d.The tripartite declaration of principles regarding multinational companies and the social policy of the International Labour Organisation.
e.The Global Initiative for presenting Sustainability Reports of the GRI (Global Reporting Initiative).
Pursuant to Decree-Law 18/2017 of 24th November, which modifies the Commercial Code, the consolidated text of the Capital Companies Act and the Accounts Auditing Act, regarding non-financial information and diversity, the European Directive has been transposed into Spanish Law. Thus, the new obligation of companies is as follows:
Information regarding diversity policies and non-financial information must be disclosed by all companies which:
- Are considered as public interest entities in accordance with the Accounts Auditing Act, that is to say:
a.Companies who are issuers of securities admitted to trading in official secondary markets, credit entities and insurance companies subject to supervision and control systems.
b. Entities which are legally established in view of their public importance, their size or the number of employees.
c. Groups of companies in which the dominant company is an entity comprised in sections a) and b) above.
- That as well as point 1, they comply with the following:
a.The average number of employees during the financial year exceeds 500.
b.During two consecutive financial years they fulfil at least two of the following circumstances:
i.The total of the asset items amounts to more than 20 million Euro.
ii.The net amount of the annual turnover exceeds 40 million Euro.
iii. The average number of employees during the financial year is above 250.
In accordance with article 49.6 of the Commercial Code, the statement of non-financial information shall include “necessary information in order to understand the evolution, the results and the situation of the group, the impact regarding its activity, at least concerning environmental and social issues, and likewise questions related to personnel, human rights and combating corruption and bribery”. Furthermore, it must include:
- A brief description of the business model of the group.
- A description of the policies which apply to the group regarding the issues mentioned in article 49.6 of the Commercial Code.
- The results of the applied policies.
- The main risks related to the issues mentioned in article 49.6 of the Commercial Code linked to the activities of the group, and when appropriate, their commercial relations, products or services which may have negative effects in these areas, and how such risks are handled by the group.
- The indicators of non-financial results which are relevant regarding the specific business activity.
Finally, if the company does not apply any of the above policies in any of the issues set forth in the above, it must offer a clear and substantiated explanation in this regard.
Pedro Blanco Guardado
For more information, please contact: email@example.com
12th of January, 2018