Several French and European leaders met on Tuesday 8 December at an online seminar organised by the French Ministry of the Economy and Finance on the revision of the publication of non-financial information directive (NFRD), expected at the end of March 2021 and which should force companies to disclose more data on climate and the environment (see EUROPE 12430/22).
“We need relevant, reliable and comparable data on a European scale”, said French Finance Minister Bruno Le Maire at the opening of the seminar. The revision of the directive is an “important step” that will be ardently defended by France, he assured.
Olivia Grégoire, the Secretary of State to the Minister for Social, Solidarity and Responsible Economy, explained to the press before the seminar that this was not only a technical subject, but also a “sovereignty issue”.
According to her, the EU should not “make the same mistake as with the ‘IFRS’ norms in the 2000s by leaving it to the US”, but should “build its own non-financial benchmark”.
The subject is all the more important for France, as it could land on the table of the EU Council during the French Presidency, which will begin in January 2022.
Making the EU a standard-setter
EU Financial Services Commissioner Mairead McGuinness has confirmed that the revision of the NFRD will establish a framework for European standards and define the information that companies will be required to disclose.
“We want EU standards that match the high level of ambition set in the Green Deal”, she said, acknowledging the need for mandatory standards for companies falling within the scope of the directive.
But the Commission is also considering a possible extension of the scope to cover more companies. While she felt that “for most SMEs, voluntary standards may be more appropriate” so as not to overburden them, she nevertheless stressed that this issue will need to be addressed, as non-financial reporting is likely to become increasingly a key factor in obtaining financing in the framework of the Capital Markets Union.
The Commission is also reflecting on EU-level audit requirements for non-financial reporting and on a reporting obligation for non-EU companies listed on EU markets.
EFRAG recommendations early 2021
All eyes are now on the European Financial Reporting Advisory Group (EFRAG), which was asked by the European Commission at the end of June to provide technical advice in the event that the EU decides to develop non-financial reporting standards as part of the revision of the ‘NFRD’.
Preparatory work is being carried out by a multi-stakeholder working group (see EUROPE 12554/21), which must submit its final recommendations by 31 January 2021.
The Chair of this working group, Patrick de Cambourg, the current Chairman of the French Accounting Standards Authority, returned to the conference on the main conclusions of the progress report which the group published at the end of October (see EUROPE 12603/24).
According to him, there is “real European momentum” which must be used as a basis to create a more robust and coherent environment in terms of non-financial information. Preparation and collection of data will be two key elements of an appropriate environment, he stressed.
The preparatory work has also made it possible to identify about 100 existing initiatives in this area, of very different natures. “This illustrates a dynamic trend, but requires simplification”, he estimated. (Original version in French by Marion Fontana)