"EU beats new path on corporate responsibility", 3 May 2016

A new European Union law enters into force at the end of the year requiring over 6,000 large, EU public-interest entities (listed companies, banks, insurance undertakings and other companies designated by member states) to report annually on the human rights, environmental and social impacts and risks linked to their operations, products and services - throughout their supply and subcontracting chains...Drawing on the key concept of “due diligence” from the UN's Guiding Principles on Business and Human Rights, NFR [non-financial reporting directive] also looks at the procedures put in place to identify and mitigate these risks...The NFR Directive is an important step forward, but it must be seen as an integral part of broader developments. Its shortcomings will need to be addressed during the implementation and revision phases...For one, without being over-prescriptive, there is a danger that the reporting will be too open to interpretation, may miss material factors, and not be comparable between companies. The directive’s scope was also essentially restricted to the largest EU public-interest business entities, in order to achieve the political consensus for it to be agreed...These issues could be addressed when countries incorporate NFR into national law. EU Member States can, and should, go beyond the directive's minimum requirement regarding the size of companies covered, transforming NFR into a wider business standard. An ambitious transposition should also provide a framework of key performance indicators that would assure comparability in all reporting areas, from human rights to resource use...We encourage the European Commission to take into account the opinion of all stakeholders who contributed to the consultation, and we encourage all EU-based businesses to start preparing for their first Non-Financial Reports – in the ambitious, forward-looking and holistic spirit the legislation is intended to achieve.