71 Amendments of Barry ANDREWS related to 2021/0104(COD)
Amendment 82 #
Proposal for a directive
Citation 5 a (new)
Citation 5 a (new)
Having regard to the development cooperation objectives pursuant to Article 208 of the Treaty on the Functioning of the European Union,
Amendment 87 #
Proposal for a directive
Recital 5
Recital 5
Amendment 88 #
Proposal for a directive
Recital 7
Recital 7
(7) Many stakeholders consider the term ‘non-financial’ to be inaccurate, in particular because it implies that the information in question has no financial relevance. Increasingly, however, the information in question does have financial relevance. Many organisations, initiatives and practitioners in this field refer to ‘sustainability’ information. It is therefore preferable to use the term ‘sustainability information’ in place of ‘non-financial information’. Directive 2013/34/EU should therefore be amended to take account of this change in terminology and to align sustainability reporting standards with financial reporting standards.
Amendment 91 #
Proposal for a directive
Recital 8
Recital 8
(8) The ultimate beneficiaries of better sustainability reporting by undertakings are individual citizens and savers. .Savers who want to invest sustainably will have the opportunity to do so, while all citizens should benefit from a stable, transparent, sustainable and inclusive economic system. To realise these benefits, the sustainability information disclosed in undertaking’s annual reports first has to reach two primary groups (‘users’). The first group of users consists of investors, including asset managers, who want to better understand the risks and opportunities that sustainability issues pose to their reputation and investments and the impacts of those investments on people, in particular workers and local communities, and the environment. The second group of users consists of organisations, including international organisations, national, regional and local governments, non- governmental organisations, as well as communities and social partners, that wish to better hold undertakings to account for their impacts on people and the environment. Other stakeholders may also make use of sustainability information disclosed in annual reports. The business partners of undertakings, including customers, may rely on this information to understand, and where necessary report on, the sustainability risks and impacts through their own value chains. Policy makers, social partners, non-governmental organisations and environmental agencies may use such information, in particular on an aggregate basis, to monitor environmental and social trends, to contribute to environmental accounts and social progress, and to inform public policy. Few individual citizens and consumers directly consult undertaking’s reports, but they may use such information indirectly such as when considering the advice or opinions of financial advisers or non-governmental organisations. Many investors and asset managers purchase sustainability information from third party data providers, who collect information from various sources, including public corporate reports.
Amendment 93 #
Proposal for a directive
Recital 9
Recital 9
(9) There has been a very significant increase in demand for corporate sustainability information in recent years, especially on the part of the investment community. That increase in demand is driven by the changing nature of risks to undertakings and growing investor awareness of the financial implications of these risks. That is especially the case for climate-related financial risks. Awareness of the risks to undertakings and to investments resulting from other environmental issues and from social issues, including health issues, is also growing. The increase in demand for sustainability information is also driven by the growth in investment products that explicitly seek to meet certain sustainability standards or achieve certain sustainability objectives. Part of that increase is the logical consequence of previously adopted Union legislation, notably Regulation (EU) 2019/2088 and Regulation (EU) 2020/852. Some of the increase would have happened in any case, due to fast-changing citizen awareness, consumer preferences and market practices. The COVID-19 pandemic will further accelerate the increase in users’ information needs, in particular as it has exposed the vulnerabilities of workers and of undertaking’s due diligence along the supply and value chains. Information on environmental impacts is also relevant in the context of mitigating future pandemics with human disturbance of ecosystems increasingly linked to the occurrence and spread of diseases.
Amendment 98 #
Proposal for a directive
Recital 12
Recital 12
(12) In the absence of policy action, the gap between users’ information needs and the sustainability information reported by undertakings is expected to grow. This gap has significant negative consequences. Investors are unable to take sufficient account of sustainability-related risks and opportunities in their investment decisions. The aggregation of multiple investment decisions that do not take adequate account of sustainability-related risks has the potential to create systemic risks that threaten financial stability. The European Central Bank and international organisations such as the Financial Stability Board have drawn attention to those systemic risks, in particular in the case of climate. Investors are also less able to channel financial resources to undertakings and economic activities that address and do not exacerbate social and environmental problems, which undermines the objectives of the European Green Deal and the Action Plan on Financing Sustainable Growth. Non- governmental organisations, social partners, communities affected by undertakings’ activities, and other stakeholders are less able to hold undertakings accountable for their adverse impacts on people, the environment and on the environmentrule of law and good governance systems, especially in developing countries where the institutions that are in charge of defending and protecting those organisations, social partners, communities and other stakeholders are often lacking in capacities. This creates an accountability deficit, and may contribute to lower levels of citizen trust in businesses, which in turn may have negative impacts on the efficient functioning of the social market economy. The lack of generally accepted metrics and methods for measuring, valuing, and managing sustainability-related risks is also an obstacle to the efforts of undertakings to ensure that their business models and activities are sustainable.
Amendment 103 #
Proposal for a directive
Recital 15
Recital 15
(15) Articles 19a and 29a of Directive 2013/34/EU apply to large undertakings that are public-interest entities with an average number of employees in excess of 500, and to public-interest entities that are parent undertakings of a large group with an average number of employees in excess of 500 on a consolidated basis, respectively. In view of the growth of users’ needs for sustainability information, additional categories of undertakings should be required to report such information. It is therefore appropriate to require all large undertakings and all undertakings listed on regulated markets, except micro undertakings, to report detailed susall small and medium sized undertakinability information. In addition, all undertakings that are parent undertakings of large groups should prepare sustainability reporting at group levelgs operating in high risk sectors as well as undertakings established outside the Union, but operating in the internal market, to report detailed sustainability information.
Amendment 111 #
Proposal for a directive
Recital 17 a (new)
Recital 17 a (new)
(17 a) The specific situation of undertakings which, although not having any legal establishment in the Union, regularly engage in significant economic activity within the Union, should be taken into account. Such undertakings should be subject to the same obligations as those established in the territory of the Union.
Amendment 113 #
Proposal for a directive
Recital 18
Recital 18
(18) Considering the growing relevance of sustainability-related risks and taking into account that small and medium-sized enterprises (SMEs) listed on regulated markets comprise a significant proportion of all listed undertakings in the Union, in order to ensure investor protection as well as due diligence with regard to the environment, human rights and good governance, it is appropriate to require that also those SMEs disclose information on sustainability matters. It is also appropriate to require all SMEs operating in high risk sectors of economic activity to carry out sustainability reporting, defined as those sectors with a significant impact on human rights, the environment and good governance. The introduction of this requirement will help to ensure that financial market participants can include smaller listed undertakings in investment portfolios on the basis that they report the sustainability information that financial market participants need. It will therefore help to protect and enhance the access of smaller listed undertakings to financial capital, and avoid discrimination against such undertakings on the part of financial market participants. The introduction of this requirement is also necessary to ensure that financial market participants have the information they need from investee undertakings to be able to comply with their own sustainability disclosure requirements laid down in Regulation (EU) 2019/2088. SMEs listed on regulated markets should, however, be provided with sufficient time to prepare for the application of the requirement to report sustainability information, due to their smaller size and more limited resources, and taking account of the difficult economic circumstances created by the COVID-19 pandemic. They should also be given the possibility to report according to standards that are proportionate to the capacities and resources of SMEs. Non- SMEs not carrying out high risk economic activities and non-listed SMEs can also choose to use these proportionate standards on a voluntary basis. The SME standards will set a reference for undertakings that are within the scope of the Directive regarding the level of sustainability information that they could reasonably request from SME suppliers and clients in their value chains.
Amendment 115 #
Proposal for a directive
Recital 18 a (new)
Recital 18 a (new)
(18 a) Certain sectors of economic activity are recognised as posing particularly significant sustainability risks. In order to ensure that this Directive can also apply to such high-risk sectors of economic activity they should be defined and the power to adopt a delegated act in accordance with Article 290 of the Treaty on the Functioning of the European Union in respect of establishing a list of high-risk sectors of economic activity should be delegated to the Commission. It is of particular importance that the Commission carry out appropriate consultations during its preparatory work, including at expert level, and that those consultations be conducted in accordance with the principles laid down in the Interinstitutional Agreement of 13 April 2016 on Better Law-Making. In particular, to ensure their equal participation in the preparation of delegated acts, Parliament and the Council should receive all documents at the same time as Member States’ experts, and their experts should systematically have access to meetings of Commission expert groups dealing with the preparation of delegated acts. Small and medium sized undertakings carrying out a high risk economic activity should also be subject to sustainability reporting obligations.
Amendment 117 #
Proposal for a directive
Recital 21
Recital 21
(21) Articles 19a(3) and 29a(3) of Directive 2013/34/EU currently exempt all subsidiary undertakings from the obligation to report non-financial information where such undertakings and their subsidiary undertakings are included in the consolidated management report of their parent undertaking, as defined in that Directive, provided this includes the required non-financial information. It is necessary, however, to ensure that sustainability information is easily accessible for users, and to bring transparency about which is the parent undertaking of the exempted subsidiary undertaking which is reporting at consolidated lethe activities of all the undertakings covered by the scope of that Directivel. It is therefore necessary to require those subsidiary undertakings to publish the consolidateda management report of their parent undertaking and to include a reference in their management report to the fact that they are exempted from reporting sustainacontaining information on sustainability. The absence of an exemption does not affect the possibility information. That exemption should also apply where the parent undertaking reporting at consolidated level is a third country under a parent undertaking to pool costs and resources with its subsidiaries in order for them to fulfil their obligations concerning sustakingability reporting sustainability information in accordance with the requirements of this Directive or in a manner equivalent to EU sustainability reporting standardsand auditing of sustainability reporting. Nor does it affect the possibility for parent undertakings to produce a consolidated management report.
Amendment 121 #
Proposal for a directive
Recital 22
Recital 22
Amendment 124 #
Proposal for a directive
Recital 24
Recital 24
(24) The list of sustainability matters on which undertakings are required to report should be as coherent as possible withbuilt on the definition of ‘sustainability factors’ laid down in Regulation (EU) 2019/2088. That list should also correspond to the needs and expectations of users and undertakings themselves, who often use the terms ‘environmental’, ‘social’ and ‘governance’ as a means to categorise the three main sustainability matters. The list of sustainability factors laid down in Regulation (EU) 2019/2088 does not explicitly include governance matters. The definition of sustainability matters in Directive 2013/34/EU should therefore be based on the definition of ‘sustainability factors’ laid down in Regulation (EU) 2019/2088, but with the addition of governance matters. That definition should also be fully aligned with the international definition of ‘due diligence’ in the UN Guiding Principles on Business and Human Rights and OECD Guidelines for Multinational Enterprises and corresponding guidance that this Directive assumes and should take into account the definitions provided by the Parliament in its resolution of 10 March 2021 on Corporate due diligence and corporate accountability. The due diligence requirements provided for in this Directive should be adapted so that they are in line with future legislation on sustainable corporate governance and due diligence.
Amendment 133 #
Proposal for a directive
Recital 27
Recital 27
(27) To ensure consistency with international instruments such as the UN Guiding Principles on Business and Human Rights, including the UNGPs 10+, and the OECD Due Diligence Guidance for Responsible Business Conduct, as well as other regional instruments such as the Inter-American Standards for Business and human rights, the due diligence disclosure requirements should be specified in greater detail than is the case in Article 19a(1), point (b), and Article 29a(1), point (b) of Directive 2013/34/EU. Due diligence is the process that undertakings carry out to identify, prevent, mitigate and remediate the principal actual and potential adverse impacts connected with their activities and identifies how they address those adverse impacts. Impacts connected with an undertaking’s activities include impacts directly caused by the undertaking, impacts to which the undertaking contributes, and impacts which are otherwise linked to the undertaking’s supply and value chain. The due diligence process concerns the whole value chain of the undertaking including its own operations, its products and services, its business relationships and its supply chains. In alignment with the UN Guiding Principles on Business and Human Rights, an actual or potential adverse impact is to be considered principal where it measures among the greatest impacts connected with the undertaking’s activities based on: the gravity of the impact on people or the environment; the number of individuals that are or could be affected, or the scale of damage to the environment; and the ease with which the harm could be remediated, restoring the environment or affected people to their prior state. With regard to the impacts on the rule of law and governance systems of the country where the undertaking and its value and supply chains are operating, consistency and coherence should also be pursued with other international and regional instruments, such as the UN Convention against Corruption, Section VII of the OECD Guidelines for Multinational Enterprises and the principles of the OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions and related Recommendations.
Amendment 143 #
Proposal for a directive
Recital 34
Recital 34
(34) The European Financial Reporting Advisory Group (EFRAG) is a non-profit association established under Belgian law that serves the public interest by providing advice to the Commission on the endorsement of international financial reporting standards. EFRAG has established a reputation as a European centre of expertise on corporate reporting, and is well placed to foster coordination between European sustainability reporting standards and international initiatives that seek to develop standards that are consistent across the world. In March 2021, a multi-stakeholder task force set up by EFRAG published recommendations for the possible development of sustainability reporting standards for the European Union. Those recommendations contain proposals to develop a coherent and comprehensive set of reporting standards, covering all sustainability matters from a double-materiality perspective. Those recommendations also contain a detailed roadmap for developing such standards, and proposals for mutually reinforcing cooperation between global standard- setting initiatives and standard-setting initiatives of the European Union. In March 2021, the EFRAG President published recommendations for possible governance changes to EFRAG if it were to be asked to develop technical advice about sustainability reporting standards. These recommendations include offsetting up within EFRAG a new sustainability reporting pillar while not significantly modifying the existing financial reporting pillar. When adopting sustainability reporting standards, the Commission should take account of technical advice that EFRAG will develop. In order to ensure high-quality standards that contribute to the European public good and meet the needs of undertakings and of users of the information reported, EFRAG’s technical advice should be developed with proper due process, public oversight and transparency, accompanied by cost benefit analyses, and be based on and developed with the expertise of relevant stakeholdersa broad consultation involving social partners, consumer organisations, NGOs and other relevant stakeholders such as international organisations or governments from countries where the undertaking or its value and supply chain will operate in order to represent the interests of both groups of users referred to in Recital 8 of this Directive. To ensure that Union sustainability reporting standards take account of the views of the Member States of the Union, before adopting the standards the Commission should consult the Member State Expert Group on Sustainable Finance referred to in Article 24 of Regulation (EU) 2020/852 on EFRAG’s technical advice. The European Securities and Markets Authority (ESMA) plays a role in drafting regulatory technical standards pursuant to Regulation (EU) 2019/2088 and there needs to be coherence between those regulatory technical standards and sustainability reporting standards. According to Regulation (EU) No 1095/2010 of the European Parliament and of the Council54 , ESMA also plays a role in promoting supervisory converge in the enforcement of corporate reporting by issuers whose securities are listed on EU regulated markets and who will be required to use these sustainability reporting standards. Therefore, ESMA should be required to provide an opinion on EFRAG’s technical advice. This opinion should be provided within two months from the date of receipt of the request from the Commission. In addition, the Commission should consult the European Banking Authority, the European Insurance and Occupational Pensions Authority, the European Environment Agency, the European Union Agency for Fundamental Rights, the European Central Bank, the Committee of European Auditing Oversight Bodies and the Platform on Sustainable Finance to ensure that the sustainability reporting standards are coherent with relevant Union policy and legislation. Where any of those bodies decide to submit an opinion, they shall do so within two months from the date of being consulted by the Commission. _________________ 54Regulation (EU) No 1095/2010 of the European Parliament and of the Council of 24 November 2010 establishing a European Supervisory Authority (European Securities and Markets Authority), amending Decision No 716/2009/EC and repealing Commission Decision 2009/77/EC (OJ L 331, 15.12.2010, p. 84).
Amendment 145 #
Proposal for a directive
Recital 35
Recital 35
(35) Sustainability reporting standards should be coherent with other Union legislation. Those standards should in particular be aligned with the disclosure requirements laid down in Regulation (EU) 2019/2088, and they should take account of underlying indicators and methodologies set out in the various delegated acts adopted pursuant to Regulation (EU) 2020/852, disclosure requirements applicable to benchmark administrators pursuant to Regulation (EU) 2016/1011 of the European Parliament and of the Council55 , the minimum standards for the construction of EU climate transition benchmarks and EU Paris-aligned benchmarks; and of any work carried out by the European Banking Authority in the implementation of the Pillar III disclosure requirements of Regulation (EU) No 575/2013. Standards should take account of Union environmental legislation, including Directive 2003/87/EC of the European Parliament and of the Council56 and Regulation (EC) No 1221/2009 of the European Parliament and of the Council57 , and should take account of Commission Recommendation 2013/179/EU58 and its annexes, and their updates. OAll other relevant Union legislation, including Directive 2010/75/EU of the European Parliament and of the Council59 , and requirements laid down in Union law for undertakings as regards directors’ duties and due diligence, should also be taken into account. _________________ 55 Regulation (EU) 2016/1011 of the European Parliament and of the Council of 8 June 2016 on indices used as benchmarks in financial instruments and financial contracts or to measure the performance of investment funds and amending Directives 2008/48/EC and 2014/17/EU and Regulation (EU) No 596/2014 (OJ L 171, 29.6.2016, p. 1). 56Directive 2003/87/EC of the European Parliament and of the Council of 13 October 2003 establishing a scheme for greenhouse gas emission allowance trading within the Community and amending Council Directive 96/61/EC (OJ L 275, 25.10.2003, p. 32). 57Regulation (EC) No 1221/2009 of the European Parliament and of the Council of 25 November 2009 on the voluntary participation by organisations in a Community eco-management and audit scheme (EMAS), repealing Regulation (EC) No 761/2001 and Commission Decisions 2001/681/EC and 2006/193/EC (OJ L 342, 22.12.2009, p. 1). 58Commission Recommendation 2013/179/EU of 9 April 2013 on the use of common methods to measure and communicate the life cycle environmental performance of products and organisations (OJ L 124, 4.5.2013, p. 1). 59 Directive 2010/75/EU of the European Parliament and of the Council of 24 November 2010 on industrial emissions (integrated pollution prevention and control) (OJ L 334, 17.12.2010, p. 17).
Amendment 152 #
Proposal for a directive
Recital 39
Recital 39
(39) Sustainability reporting standards should also take account of internationally recognised principles and frameworks on responsible business conduct, corporate social responsibility, and sustainable development, including the UN Sustainable Development Goals, the UN Guiding Principles on Business and Human Rights, and its guidance on ensuring that the activities of human rights defenders are not obstructed, the OECD Guidelines for Multinational Enterprises, the OECD Due Diligence Guidance for Responsible Business Conduct and related sectoral guidelines, the UN Global Compact, the Tripartite Declaration of Principles of the International Labour Organisation concerning Multinational Enterprises and Social Policy, the ISO 26000 standard on social responsibility, and the UN Principles for Responsible Investment. Other frameworks such as the UN Convention against Corruption, Section VII of the OECD Guidelines for Multinational Enterprises, the principles of the OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions and related recommendations should also be taken into account.
Amendment 159 #
Proposal for a directive
Recital 43
Recital 43
(43) Sustainability reporting standards should specify the information that undertakings should disclose on social factors, including employee factors and human rights. Such information should cover the impacts of undertakings on people, including on human health. The information that undertakings disclose about human rights should include information about forced labour in their value chains where relevantand child labour in their value and supply chains. Reporting standards that address social factors should specify the information that undertakings should disclose with regard to the principles of the European Pillar of Social Rights that are relevant to businesses, including equal opportunities for all and working conditions. The European Pillar of Social Rights Action Plan adopted in March 2021 calls for stronger requirements on undertakings to report on social issues. The reporting standards should also specify the information that undertakings should disclose with regard to the human rights, fundamental freedoms, democratic principles and standards established in the International Bill of Human Rights and other core UN human rights conventions, such as the Convention on the Rights of the Child and the UN Declaration on the Rights of Indigenous Peoples, the International Labour Organization’s Declaration on Fundamental Principles and Rights at Work, the fundamental conventions of the International Labour Organisation, and the Charter of Fundamental Rights of the European Union. .
Amendment 166 #
Proposal for a directive
Recital 46
Recital 46
(46) Undertakings in the same sector are often exposed to similar sustainability- related risks, and they often have similar impacts on society and the environment. Comparisons between undertakings in the same sector are especially valuable to investors and other users of sustainability information. Sustainability reporting standards adopted by the Commission should therefore specify both information that undertakings in all sectors should disclose and information that undertakings should disclose depending on their sector of activity. Standards should also take account of the difficulties that undertakings may encounter in gathering information from actors throughout their value chain, especially from SME suppliers and, from suppliers in emerging markets and economies or suppliers operating in fragile contexts, as defined by the OECD's 'States of Fragility' report, conflict-related areas or affected by security concerns.
Amendment 167 #
Proposal for a directive
Recital 47
Recital 47
(47) To meet the information needs from users in a timely manner, and in particular given the urgency to meet the information needs of financial market participants subject to the requirements laid down in the delegated acts adopted pursuant to Article 4, paragraphs 6 and 7 of Regulation (EU) 2019/2088, the Commission should adopt a first set of reporting standards by 31 October 2022. That set of reporting standards should specify the information that undertakings should disclose with regard to all reporting areas and sustainability matters, and that financial market participants need to comply with the disclosure obligations laid down in Regulation (EU) 2019/2088. The Commission should adopt a second set of reporting standards at the latest by 31 October 2023, specifying complementary information that undertakings should disclose about sustainability matters and reporting areas where necessary, and information that is specific to the sector in which an undertaking operates. Standards for undertakings active in high risk sectors that have severe impacts as regards sustainability factors should be developed as a priority. The Commission should review the standards every 3 years to take account of relevant developments, including the development of international standards. A one-off review of the standards should take place following the adoption of the due diligence legislation, in order to ensure as close as possible alignment between corporate sustainability reporting and due diligence.
Amendment 179 #
Proposal for a directive
Recital 57 a (new)
Recital 57 a (new)
(57 a) A high level of independence should be ensured for sustainability reporting assurance operations by establishing the principle of incompatibility between a statutory audit engagement and an assurance of sustainability reporting engagement being carried out by the same statutory auditor or the same audit firm.
Amendment 182 #
Proposal for a directive
Recital 60
Recital 60
(60) Article 27 of Directive 2006/43/EC sets out rules on the statutory audit of a group of undertakings. Those rules should be extended to the assurance of consolidated sustainability reporting, where the statutory auditor performs the statutory audit.
Amendment 188 #
Proposal for a directive
Article 1 – paragraph 1 – point 1
Article 1 – paragraph 1 – point 1
Directive 2013/34/EU
Article 1 – paragraph 3 – introductory part
Article 1 – paragraph 3 – introductory part
3. The coordination measures prescribed by Articles 19a, 19d, 29a, 30 and 33, Article 34(1), second subparagraph, point (aa), paragraphs 2 and 3 of Article 34, and Article 51 of this Directive shall also apply to the laws, regulations and administrative provisions of the Member States relating to the following undertakings, provided that they meet the criteria laid down in Article 19a(1) of this Directive, regardless of their legal form:
Amendment 193 #
Proposal for a directive
Article 1 – paragraph 1 – point 2
Article 1 – paragraph 1 – point 2
Directive 2013/34/EU
Article 2 – point 17
Article 2 – point 17
(17) ‘sustainability matters’ means sustainability factors as defined in Article 2, point (24) of Regulation (EU) 2019/2088 of the European Parliament and of the Council\*4, namely respect for environmental, social and employee issues, human rights and governance factors;
Amendment 196 #
Proposal for a directive
Article 1 – paragraph 1 – point 2
Article 1 – paragraph 1 – point 2
Directive 2013/34/EU
Article 2 – point 20a (new)
Article 2 – point 20a (new)
(20 a) ‘high-risk economic activity sector’ means economic activities likely to have serious negative impacts on sustainability matters, namely respect for human rights, the environment, social and employee issues, good governance and the rule of law of countries, regions and territories where the undertaking or its supply chains operate;
Amendment 201 #
Proposal for a directive
Article 1 – paragraph 1 – point 2
Article 1 – paragraph 1 – point 2
Directive 2013/34/EU
Article 2 – point 20b (new)
Article 2 – point 20b (new)
(20 b) ‘Specific science-based measurable targets’ means indicators which take into account the UN programme ‘Transforming our world: the 2030 Agenda for Sustainable Development’, reports and analyses of the Organisation for Economic Cooperation and Development (OECD) on the Sustainable Development Goals and the EU’s ‘Europe 2020 strategy’.
Amendment 202 #
Proposal for a directive
Article 1 – paragraph 1 – point 2
Article 1 – paragraph 1 – point 2
(20 c) ‘sustainability strategy’ means the undertaking’s plans of action to achieve long term SDGs and targets in line with the UN 2030 Agenda, the Paris Agreement and other relevant international commitments, as well as Union policies and legislation. It includes corporate due diligence processes aimed at identifying and managing the potential or actual adverse risks and impacts linked to sustainability matters.
Amendment 205 #
Proposal for a directive
Article 1 – paragraph 1 – point 3
Article 1 – paragraph 1 – point 3
Directive 2013/34/EU
Article 19a – paragraph 1
Article 19a – paragraph 1
1. Large undertakings and, as of 1 January 2026, small and medium-sized undertakings which are undertakings referred to in Article 2, point (1), point (a undertakings referred to in Article 3(7) which are governed by the law of a third country and are not established in the territory of the Union when they operate in the internal market selling goods or providing services under the arrangements set out in Article 19b(1), and, as of 1 January 2026, small and medium-sized undertakings which are undertakings referred to in Article 2, point (1), point (a), and small and medium-sized undertakings referred to in Article 3(3) which operate in one or more of the high risk economic activities referred to in Article 19a (8), shall include in the management report information necessary to understand the undertaking’s impacts on sustainability matters, and information necessary to understand how sustainability matters affect the undertaking’s development, performance and position.
Amendment 209 #
Proposal for a directive
Article 1 – paragraph 1 – point 3 Directive 2013/34/EU
Article 1 – paragraph 1 – point 3 Directive 2013/34/EU
(a) a brief description of the undertaking's business model and strategy and its implementation, including:
Amendment 212 #
Proposal for a directive
Article 1 – paragraph 1 – point 3
Article 1 – paragraph 1 – point 3
Directive 2013/34/EU
Article 19a – paragraph 2 – point a – sub–point ii
Article 19a – paragraph 2 – point a – sub–point ii
(ii) the opportunities and risks for the undertaking related to sustainability matters;
Amendment 216 #
Proposal for a directive
Article 1 – paragraph 1 – point 3
Article 1 – paragraph 1 – point 3
Directive 2013/34/EU
Article 19a – paragraph 2 – subparagraph 1 point a – sub–point iii a (new)
Article 19a – paragraph 2 – subparagraph 1 point a – sub–point iii a (new)
(iii a) how the business model and strategies contribute to the implementation of the UN 2030 Agenda for Sustainable development in the developing countries where the undertaking or its supply and value chains operate;
Amendment 219 #
Proposal for a directive
Article 1 – paragraph 1 – point 3
Article 1 – paragraph 1 – point 3
Directive 2013/34/EU
Article 19a – paragraph 2 – subparagraph 2 – point a – sub–point iv
Article 19a – paragraph 2 – subparagraph 2 – point a – sub–point iv
(iv) how the undertaking’s business model and strategy take account of the interests and needs of the undertaking’s stakeholders and of thrisk management and of the principal actual or potential adverse impacts of the undertaking on sustainability matters along the entire supply and value chain;
Amendment 221 #
Proposal for a directive
Article 1 – paragraph 1 – point 3
Article 1 – paragraph 1 – point 3
Directive 2013/34/EU
Article 19a – paragraph 2 – subparagraph 2 – point a – sub–point v
Article 19a – paragraph 2 – subparagraph 2 – point a – sub–point v
(v) how the undertaking’s sustainability strategy has been implemented and the results achieved with regard to sustainability matters;
Amendment 224 #
Proposal for a directive
Article 1 – paragraph 1 – point 3
Article 1 – paragraph 1 – point 3
Directive 2013/34/EU
Article 19a – paragraph 2 – point b
Article 19a – paragraph 2 – point b
(b) a description of the targets related to sustainability matters set by the undertaking and of, the actions to be taken to successfully achieve those targets, the progress the undertaking has made towards achieving those targets and where relevant, an analysis of the lack of progress in relation to those targets and corrective measures;
Amendment 229 #
Proposal for a directive
Article 1 – paragraph 1 – point 3
Article 1 – paragraph 1 – point 3
Directive 2013/34/EU
Article 19a – paragraph 2 – subparagraph 1 – point c
Article 19a – paragraph 2 – subparagraph 1 – point c
(c) a description of the role and the composition of the administrative, management and supervisory bodies with regard to sustainability matters;
Amendment 232 #
Proposal for a directive
Article 1 – paragraph 1 – point 3
Article 1 – paragraph 1 – point 3
Directive 2013/34/EU
Article 19a – paragraph 2 – point e – subpoint i
Article 19a – paragraph 2 – point e – subpoint i
(i) the due diligence process implemented with regard to sustainability matters in particular regarding human rights, social rights, rule of law and good governance systems and environmental due diligence along the entire supply and value chain, in accordance with international and regional human rights conventions, guidelines and standards such as the UN Guiding Principles on Business and Human Rights, the OECD Due Diligence Guidance for Responsible Business Conduct, the International Labour Organisation (ILO) Declaration on Fundamental Principles and Rights at Work, the ILO fundamental conventions and the Charter of Fundamental Rights of the European Union. The reporting requirements as regards due diligence shall be based on the upcoming legislation on corporate due diligence;
Amendment 237 #
Proposal for a directive
Article 1 – paragraph 1 – point 3
Article 1 – paragraph 1 – point 3
(ii) the principal actual or potential adverse impacts on sustainability matters connected with the undertaking’s value chain, as identified in the implementation of the due diligence strategy, including its own operations, its products and, services and assets, its business relationships, its subsidiaries and its supply chain;
Amendment 250 #
Proposal for a directive
Article 1 – paragraph 1 – point 3
Article 1 – paragraph 1 – point 3
Directive 2013/34/EU
Article 19a – paragraph 3 – subparagraph 4
Article 19a – paragraph 3 – subparagraph 4
Amendment 253 #
Proposal for a directive
Article 1 – paragraph 1 – point 3
Article 1 – paragraph 1 – point 3
Directive 2013/34/EU
Article 19a – paragraph 3 – subparagraph –1 (new)
Article 19a – paragraph 3 – subparagraph –1 (new)
3 a. The information referred to in paragraphs 1 and 2 shall be published in a specific section of the management report and in a formal equivalent to, and consistent with, that laid down for the publication of financial statements.
Amendment 256 #
Proposal for a directive
Article 1 – paragraph 1 – point 3
Article 1 – paragraph 1 – point 3
Directive 2013/34/EU
Article 19a – paragraph 6a (new)
Article 19a – paragraph 6a (new)
6 a. The Commission shall be empowered to adopt delegated acts in accordance with Article 49 to establish and amend the list of high-risk sectors of economic activity set out in Article 19a(1). In establishing that list the Commission shall take into account the work of the Platform on Sustainable Finance established in accordance with Article 20 of Regulation (EU) 2020/852 and the OECD Due Diligence Guidance for Responsible Business Conduct, including for mining, extractive industries, agriculture, clothing and footwear, finance and international shipping, as well as other relevant UN bodies’ guidance on specific sectors. The list of sectors taken into account in this definition shall take account of the need to be consistent with the NACE classification.
Amendment 257 #
Proposal for a directive
Article 1 – paragraph 1 – point 3
Article 1 – paragraph 1 – point 3
Directive 2013/34/EU
Article 19a – paragraph 7 – subparagraph 1
Article 19a – paragraph 7 – subparagraph 1
Amendment 261 #
Proposal for a directive
Article 1 – paragraph 1 – point 3
Article 1 – paragraph 1 – point 3
Directive 2013/34/EU
Article 19a – paragraph 7 – subparagraph 2
Article 19a – paragraph 7 – subparagraph 2
The consolidated management report of the parent undertaking referred to in subparagraph 1 shall be published in accordance with Article 30, in the manner prescribed by the law of the Member State by which the undertaking that is exempted from the obligations set out inwhich meets the requirements referred to paragraphs 1 to 4 of this Article is governed.
Amendment 264 #
Proposal for a directive
Article 1 – paragraph 1 – point 3
Article 1 – paragraph 1 – point 3
Directive 2013/34/EU
Article 19a – paragraph 7 – subparagraph 3
Article 19a – paragraph 7 – subparagraph 3
The Member State by whichwhere the undertaking that is exempted from the obligations set outwhich meets the requirements referred to in paragraphs 1 to 4 is governed, may require that the consolidated management report referred to in the first subparagraph of this paragraphof a parent undertaking referred is published in an official language of the Member State or in a language customary in the sphere of international finance, and that any necessary translation into those languages is certified.
Amendment 267 #
Proposal for a directive
Article 1 – paragraph 1 – point 3
Article 1 – paragraph 1 – point 3
Directive 2013/34/EU
Article 19a – paragraph 7 – subparagraph 4 – point b
Article 19a – paragraph 7 – subparagraph 4 – point b
Amendment 276 #
Proposal for a directive
Article 1 – paragraph 1 – point 4
Article 1 – paragraph 1 – point 4
Directive 2013/34/EU
Article 19b – paragraph 1 – subparagraph 1 – point b – sub point ii
Article 19b – paragraph 1 – subparagraph 1 – point b – sub point ii
(ii) information that undertakings shall report that is specific to the sector in which they operate. Standards for undertakings operating in high risk sectors shall be adopted as a priority.
Amendment 278 #
Proposal for a directive
Article 1 – paragraph 1 – point 4
Article 1 – paragraph 1 – point 4
Directive 2013/34/EU
Article 19b – paragraph 1 – subparagraph 1 – point b – subpoint ii a (new)
Article 19b – paragraph 1 – subparagraph 1 – point b – subpoint ii a (new)
(ii a) the specific measurable objectives based on scientific evidence set out in Article 2, point (20b);
Amendment 279 #
Proposal for a directive
Article 1 – paragraph 1 – point 4
Article 1 – paragraph 1 – point 4
Directive 2013/34/EU
Article 19b – paragraph 1 – subparagraph 1 – point b – subpoint ii b (new)
Article 19b – paragraph 1 – subparagraph 1 – point b – subpoint ii b (new)
(ii b) the criteria and implementing information rules for sustainability reporting for small and medium-sized undertakings referred to in Article 19(a)1;
Amendment 280 #
Proposal for a directive
Article 1 – paragraph 1 – point 4
Article 1 – paragraph 1 – point 4
Directive 2013/34/EU
Article 19 b – paragraph 1 – subparagraph 1 – point b – sub point ii c (new)
Article 19 b – paragraph 1 – subparagraph 1 – point b – sub point ii c (new)
(ii c) the criteria and implementing rules for sustainability reporting for undertakings referred to in Article 3(7), which are governed by the law of a third country and are not established in the territory of the Union when they operate in the internal market selling goods or providing services;
Amendment 282 #
Proposal for a directive
Article 1 – paragraph 1 – point 4
Article 1 – paragraph 1 – point 4
Directive 2013/34/EU
Article 19b – paragraph 1 – point b
Article 19b – paragraph 1 – point b
The Commission shall, at least every three years after its date of application, review any delegated act adopted pursuant to this Article, taking into consideration the technical advice of the European Financial Reporting Advisory Group (EFRAG), and where necessary shall amend such delegated act to take into account relevant developments, including developments with regard to international standards. In addition, the Commission shall carry out a one-off review of the aforementioned delegated acts following the adoption of the upcoming legislation on corporate due diligence.
Amendment 312 #
Proposal for a directive
Article 1 – paragraph 1 – point 4
Article 1 – paragraph 1 – point 4
Directive 2013/34/EU
Article 19b – paragraph 2 – subparagraph 2 – point b – sub point iii
Article 19b – paragraph 2 – subparagraph 2 – point b – sub point iii
(iii) respect for the human rights, fundamental freedoms, democratic principles and standards established in the International Bill of Human Rights and other core UN human rights conventions, including the UN Guiding Principles on Business and Human Rights, the International Labour Organization’s Declaration on Fundamental Principles and Rights at Work and the ILO fundamental conventions and the Charter of Fundamental Rights of the European Union.
Amendment 320 #
Proposal for a directive
Article 1 – paragraph 1 – point 4
Article 1 – paragraph 1 – point 4
Directive 2013/34/EU
Article 19b – paragraph 2 – subparagraph 2 – point c – sub point i
Article 19b – paragraph 2 – subparagraph 2 – point c – sub point i
(i) the role of the undertaking’s administrative, management and supervisory bodies, including with regard to sustainability matters and proper implementation of the due diligence strategy, and their composition;
Amendment 322 #
Proposal for a directive
Article 1 – paragraph 1 – point 4
Article 1 – paragraph 1 – point 4
Directive 2013/34/EU
Article 19b – paragraph 2 –subparagraph 2 – point c – sub point ii
Article 19b – paragraph 2 –subparagraph 2 – point c – sub point ii
(ii) business ethics and corporate culture, including anti-corruption and anti- brib, anti- bribery, anti-workplace violence, anti- harassment and internal arrangements within the undertaking for protecting whistleblowerys;
Amendment 327 #
Proposal for a directive
Article 1 – paragraph 1 – point 4
Article 1 – paragraph 1 – point 4
Directive 2013/34/EU
Article 19b – paragraph 2 – subparagraph 2 – point c – point iii a (new)
Article 19b – paragraph 2 – subparagraph 2 – point c – point iii a (new)
(iii a) management and quality of the relationships with state actors and in particular with public administrations, and information on public administrative procedural practices, including public procurement;
Amendment 330 #
Proposal for a directive
Article 1 – paragraph 1 – point 4
Article 1 – paragraph 1 – point 4
Directive 2013/34/EU
Article 19b – paragraph 2 – subparagraph 2 – point c – subpoint v
Article 19b – paragraph 2 – subparagraph 2 – point c – subpoint v
(v) the undertaking’s internal control and risk management systems, including in relation to the undertaking’s reporting process and implementation of the due diligence strategy.
Amendment 331 #
Proposal for a directive
Article 1 – paragraph 1 – point 4
Article 1 – paragraph 1 – point 4
Directive 2013/34/EU
Article 19b – paragraph 2 – subparagraph 2 – point c – point v a (new)
Article 19b – paragraph 2 – subparagraph 2 – point c – point v a (new)
Amendment 343 #
Proposal for a directive
Article 1 – paragraph 1 – point 5 – point a
Article 1 – paragraph 1 – point 5 – point a
Directive 2013/34/EU
Article 20 – paragraph 1 – point g
Article 20 – paragraph 1 – point g
(g) a description of the diversity policy applied in relation to the undertaking's administrative, management and supervisory bodies with regard to gender and other aspects such as, age, or educational and professional backgrounds, the objectives of that diversity policy, how it has been implemented and the results in the reporting period. If no such policy is applied, the statement shall contain an explanation as to why this is the case.;
Amendment 345 #
Proposal for a directive
Article 1 – paragraph 1 – point 7
Article 1 – paragraph 1 – point 7
Directive 2013/34/EU
Article 29a – paragraph 1
Article 29a – paragraph 1
1. Parent undertakings of a large group shall include in the consolidated management report information necessary to understand the group's impacts on sustainability matters, and information necessary to understand how sustainability matters affect the group's development, performance and position. This information shall be published in a specific section of the management report and in a format equivalent to, and compatible with, that laid down for the publication of the financial statements.
Amendment 355 #
Proposal for a directive
Article 1 – paragraph 1 – point 7
Article 1 – paragraph 1 – point 7
Directive 2013/34/EU
Article 29a – paragraph 2 – sub paragraph 1 – point a – point v
Article 29a – paragraph 2 – sub paragraph 1 – point a – point v
(v) how the group’s strategy has been implemented with regard to sustainability matters including the group's measures to ensure decent work, fair wages, training and further education for workers, information and consultation of workers;
Amendment 362 #
Proposal for a directive
Article 1 – paragraph 1 – point 7
Article 1 – paragraph 1 – point 7
Directive 2013/34/EU
Article 29a – paragraph 2 – subparagraph 1 – point e – point i
Article 29a – paragraph 2 – subparagraph 1 – point e – point i
(i) the due diligence process implemented with regard to sustainability matters, in particular regarding human rights, social rights, rule of law and good governance systems and environmental due diligence along the entire supply and value chain, in accordance with international and regional human rights conventions, guidelines and standards such as the UN Guiding Principles on Business and Human Rights, the OECD Due Diligence Guidance for Responsible Business Conduct, the International Labour Organisation (ILO) Declaration on Fundamental Principles and Rights at Work, the ILO fundamental conventions and the Charter of Fundamental Rights of the European Union. The reporting requirements as regards due diligence shall be based upon the upcoming legislation on corporate due diligence;
Amendment 376 #
Proposal for a directive
Article 1 – paragraph 1 – point 7
Article 1 – paragraph 1 – point 7
Directive 2013/34/EU
Article 29a – paragraph 3 – subparagraph 4
Article 29a – paragraph 3 – subparagraph 4
Amendment 380 #
Proposal for a directive
Article 1 – paragraph 1 – point 7
Article 1 – paragraph 1 – point 7
Directive 2013/34/EU
Article 29a – paragraph 7 – subparagraph 1
Article 29a – paragraph 7 – subparagraph 1
Amendment 387 #
Proposal for a directive
Article 1 – paragraph 1 – point 8 – point a
Article 1 – paragraph 1 – point 8 – point a
Directive 2013/34/EU
Article 30 – paragraph 1 – subparagraph 3
Article 30 – paragraph 1 – subparagraph 3
Amendment 388 #
Proposal for a directive
Article 1 – paragraph 1 – point 10 – point a – point ii
Article 1 – paragraph 1 – point 10 – point a – point ii
Directive 2013/34/EU
Article 34 – paragraph 1 – point aa
Article 34 – paragraph 1 – point aa
(aa) where applicable, express an opinion based on a limitedreasonable assurance engagement as regards the compliance of the sustainability reporting with the requirements of this Directive, including the compliance of the sustainability reporting with the reporting standards adopted pursuant to Article 19b, the process carried out by the undertaking to identify the information reported pursuant to those reporting standards, and the compliance with the requirement to mark- up sustainability reporting in accordance with Article 19d, and as regards the compliance with the reporting requirements of Article 8 of Regulation (EU) 2020/852.;
Amendment 389 #
Proposal for a directive
Article 1 – paragraph 1 – point 10 – point b
Article 1 – paragraph 1 – point 10 – point b
Directive 2013/34/EU
Article 34 – paragraph 3
Article 34 – paragraph 3
3. Member States mayshall allow an independent assurance services provider to express the opinion referred to in paragraph 1, second subparagraph, point (aa), provided that it is subject to requirements that are consistent with those set out in Directive 2006/43/EC as regards the assurance of sustainability reporting as defined in Article 2(1), point (r) of that Directive.
Amendment 402 #
Proposal for a directive
Article 1 – paragraph 1 – point 12
Article 1 – paragraph 1 – point 12
Directive 2013/34/EU
Article 51a (new)
Article 51a (new)
1 a. Article 51a is added: Article 51a Cooperation with developing countries 1. Developing countries shall be consulted in the procedure of the Commission aimed at defining the sustainability reporting standards if there is a legitimate interest based on the fact that the undertaking or its supply and value chains operate in their territory. 2. Member States and the Commission shall step up cooperation with developing countries with a view to strengthening their institutional and legal systems to effectively implement and enforce corporate sustainability reporting in line with the international, regional and Union frameworks and standards. 3. Special support shall be provided to small and medium undertakings operating in high risks sectors in developing countries with a view to facilitating the implementation of sustainability reporting requirements of this Directive, including concerning undertakings’ value and supply chains.
Amendment 405 #
Proposal for a directive
Article 1 – paragraph 1 – point 12
Article 1 – paragraph 1 – point 12
Directive 2013/34/EU
Article 51 – paragraph 2 a (new)
Article 51 – paragraph 2 a (new)
2 a. Member States may include other penalties such as: (a) exclusion from entitlement to public benefits or aid; (b) temporary or permanent exclusion from access to public funding, including tender procedures, grants and concessions; (c) temporary or permanent disqualification from the practice of commercial activities.
Amendment 409 #
Proposal for a directive
Article 1 – paragraph 1 – point 12
Article 1 – paragraph 1 – point 12
Directive 2013/34/EU
Article 51 – paragraph 3 point e a (new)
Article 51 – paragraph 3 point e a (new)
Amendment 414 #
Proposal for a directive
Article 3 – paragraph 1 – point 1
Article 3 – paragraph 1 – point 1
Directive 2006/43/EC
Article 1
Article 1
This Directive establishes rules concerning the statutory audit of annual and consolidated accounts and the assurance of annual and consolidated sustainability reporting, where this is performed either by the statutory auditor or by the audit firm carrying out the statutory audit of financial statements.;
Amendment 415 #
(cc) sustainability reporting standards; as referred to in Article 19b of Directive 2013/34/EU;
Amendment 417 #
Proposal for a directive
Article 3 – paragraph 1 – point 13
Article 3 – paragraph 1 – point 13
Directive 2006/43/EC
Article 27 a – subparagraph 2 (new)
Article 27 a – subparagraph 2 (new)
The statutory auditor or the audit firm carrying out the statutory audit of an undertaking referred to in Article 19a(1) of Directive 2013/34/EU, or any member of the network to which the statutory auditor or the audit firm belongs, shall not, directly or indirectly provide to the audited entity, to its parent undertaking or to its controlled undertakings within the Union any assurance of sustainability reporting in : (a) the period between the beginning of the period audited and the issuing of the audited report; (b) the financial year immediately preceding the period referred to in point (a) of this subparagraph.
Amendment 418 #
Proposal for a directive
Article 3 – paragraph 1 – point 14 – point e
Article 3 – paragraph 1 – point 14 – point e
Directive 2006/43/EC
Article 28 – paragraph 3 – subparagraph 1
Article 28 – paragraph 3 – subparagraph 1
The audit report shall be signed and dated by the statutory auditor or by the audit firm carrying out the audit. Where an audit firm carries out the statutory audit and, where applicable, the assurance of sustainability reporting, the audit report shall bear the signature of at least the statutory auditor(s) carrying out the statutory audit and that of the auditor carrying out the assurance of sustainability reporting on behalf of the audit firm. Where more than one statutory auditor or audit firm have been simultaneously engaged, the audit report shall be signed by all statutory auditors or at least by the statutory auditors carrying out the statutory audit and the assurance of sustainability reporting on behalf of every audit firm. In exceptional circumstances Member States may provide that such signature(s) need not be disclosed to the public if such disclosure could lead to an imminent and significant threat to the personal security of any person.;