Large companies in the European Union are facing new rules regarding the disclosure of non-financial data, under amendments to the EU Accounting Directive approved this week by European Parliament.

The amendments will require companies with more than 500 employees to disclose information relating to environmental, social, and human rights issues, as well as anti-bribery and corruption matters. The disclosures will encompass policies, risks, and results. Large, listed companies also must provide diversity information for their boards of directors, including age, gender, educational and professional background, as well as board policy information. If a firm does not have a diversity policy, it must explain why, under the new rules.

About 6,000 companies and groups will be affected overall, according to the European Commission. Small and mid-sized enterprises are exempt from the regulations.

Lawmakers say the requirements call for concise documentation rather than full-fledged reports in order to keep the administrative burden down. Those affected will have discretion as to how the disclosure will look, whether to use the UN Global Compact guidelines or models from other national or international groups. Parliament also asked the European Commission to come up with guidelines for the disclosure.

Internal Market and Services Commissioner Michel Barnier said the new regulations will help modernize disclosure requirements for large companies, with the companies themselves, investors, and the public benefiting from the increased transparency.

“Companies that already publish information on their financial and non-financial performances take a longer-term perspective in their decision-making,” Barnier said in a statement. “They often have lower financial costs, attract and retain talented employees, and ultimately are more successful. This is important for Europe's competitiveness and the creation of more jobs. Best practices should become the norm.”

The European Commission already approved the measure. European Parliament and the Council previously reached agreement on the directive in February; the Council is expected to formally adopt the changes in the next few weeks. Member States would then be required to implement the new directive.

The U.K. government welcomed the news, saying the effort will provide crucial information to investors and the public. About 500 companies in the U.K. would be affected by the law, the government said.

Business Minister Jenny Willott said even though the U.K. already has “a world-class corporate governance structure,” she welcomes any improvements to transparency requirements. The U.K. is looking to have the revised law in place by 2016.

“It's really important that these measures cover the whole EU, and I believe that they strike the right balance between ensuring companies report useful information whilst avoiding imposing unnecessary burdens on businesses,” Willott said in a statement. “This is a real step forward.”

Industry groups also welcomed the measure, including the Association of Chartered Certified Accountants (ACCA). Richard Martin, ACCA's head of corporate reporting, pointed out that many companies already voluntarily disclose the non-financial information.

Brussels-based European Coalition for Corporate Justice called the new law “an important step forward.”

“The reform recognizes that the environmental and human rights impacts of companies are of key concern for society as a whole,” ECCJ coordinator Jerome Chaplier said in a statement. “It will empower people to access information on how they might be affected by business operations, and enable shareholders to hold the management accountable for negative impact.”

However, Chaplier said he regretted how much the directive was weakened compared to the original proposal, with only about a third of companies that would have fallen under the initial proposal ultimately affected. He also pointed out that the final version allows Member States to grant companies exemptions from the new reporting requirements.

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