What you need to know about the Non-Financial Reporting Directive:
Does your company have operations in the European Union (EU) with more than 500 employees*? If so, you should read this blog carefully, as it can help your company navigate a changing legal environment.
*Or 250 employees if you are based in Sweden or Finland, or 10 employees if you are based in Greece.
The “Non-Financial Reporting Directive (NFRD)” was created to bring more transparency to the social and environmental performance of large companies. The directive sets specific criteria for what type of companies should disclose non-financial information and what guidelines they should follow and comes into force in January 2023.
An average number of employees of more than 500 during the tax year.
It is important to note that companies that fall within the scope of the NFRD, when countries implement the directive into their national law, are not required to report the taxonomy figures.
Will the NFRD impact asset owners and managers?
Financial organizations will be required to exclude all investee companies (or “entities”) not covered by the NFRD from their entity-level disclosures. This means that asset managers must identify which companies are within the scope of the NFRD and include them in their calculations of EU taxonomy KPIs (based on revenues, capital expenditures and operating expenses).