211 Amendments of Marie TOUSSAINT related to 2021/0104(COD)
Amendment 31 #
Proposal for a directive
Recital 2
Recital 2
(2) In its Action Plan: Financing Sustainable Growth the Commission set out measures to achieve the following objectives: reorient capital flows towards sustainable investment in order to achieve sustainable and inclusive growth, manage financial risks stemming from climate change, resource depletion, environmental degradation and social issues, and foster transparency and long-termism in financial and economic activity33 . The disclosure by undertakings of relevant, comparable and reliable sustainability information is a prerequisite for meeting those objectives. In its Guidelines on reporting climate- related information, the European Commission highlighted the benefits for companies to report on climate related information particularly by increasing awareness and understanding of climate related risks and opportunities within the company, diversifying investor base, creating a lower cost of capital and by improving constructive dialogue with all stakeholders. The European Parliament and the Council adopted a number of legislative acts as part of the implementation of the Action Plan on Financing Sustainable Growth. Regulation (EU) 2019/2088 of the European Parliament and of the Council34 governs how financial market participants and financial advisers are to disclose sustainability information to end investors and asset owners. Regulation (EU) 2020/852 of the European Parliament and of the Council35 creates a classification system of environmentally sustainable economic activities with the aim of scaling up sustainable investments and combatting greenwashing of financial products that unduly claim to be sustainable. Regulation (EU) 2019/2089 of the European Parliament and of the Council36 , complemented by Commission Delegated Regulations (EU) 2020/181637 , (EU) 2020/181738 and (EU) 2020/181839 , introduces environmental, social and governance (‘ESG’) disclosure requirements for benchmarks administrators and minimum standards for the construction of EU Climate Transition Benchmarks and EU Paris-aligned Benchmarks. Regulation (EU) No 575/2013 of the European Parliament and of the Council40 requires large institutions which have issued securities that are admitted to trading on a regulated market to disclose information on ESG risks from 28 June 2022. The new prudential framework for investment firms set by Regulation (EU) 2019/2033 of the European Parliament and of the Council41 and Directive (EU) 2019/2034 of the European Parliament and of the Council42 contains provisions concerning the introduction of an ESG risk dimension in the supervisory review and evaluation process (SREP) by competent authorities, and contains ESG risks disclosure requirements for investment firms, applicable from 26 December 2022. The Commission has also announced a proposal on a European Green Bond Standard in its Work Programme for 2021, following up on the Action Plan on Financing Sustainable Growth. __________________ 33 COM(2018) 97 final. 34 Regulation (EU) 2019/2088 of the European Parliament and of the Council of 27 November 2019 on sustainability- related disclosures in the financial services sector (OJ L 317, 9.12.2019, p. 1). 35Regulation (EU) 2020/852 of the European Parliament and of the Council of 18 June 2020 on the establishment of a framework to facilitate sustainable investment, and amending Regulation (EU) 2019/2088 (OJ L 198, 22.6.2020, p. 13). 36Regulation (EU) 2019/2089 of the European Parliament and of the Council of 27 November 2019 amending Regulation (EU) 2016/1011 as regards EU Climate Transition Benchmarks, EU Paris-aligned Benchmarks and sustainability-related disclosures for benchmarks (OJ L 317, 9.12.2019, p. 17). 37 Commission Delegated Regulation (EU) 2020/1816 of 17 July 2020 supplementing Regulation (EU) 2016/1011 of the European Parliament and of the Council as regards the explanation in the benchmark statement of how environmental, social and governance factors are reflected in each benchmark provided and published (OJ L 406, 3.12.2020, p. 1). 38Commission Delegated Regulation (EU) 2020/1817 of 17 July 2020 supplementing Regulation (EU) 2016/1011 of the European Parliament and of the Council as regards the minimum content of the explanation on how environmental, social and governance factors are reflected in the benchmark methodology (OJ L 406, 3.12.2020, p. 12). 39Commission Delegated Regulation (EU) 2020/1818 of 17 July 2020 supplementing Regulation (EU) 2016/1011 of the European Parliament and of the Council as regards minimum standards for EU Climate Transition Benchmarks and EU Paris-aligned Benchmarks (OJ L 406, 3.12.2020, p. 17). 40Regulation (EU) No 575/2013 of the European Parliament and of the Council of 26 June 2013 on prudential requirements for credit institutions and investment firms and amending Regulation (EU) No 648/2012 (OJ L 176, 27.6.2013, p. 1). 41Regulation (EU) 2019/2033 of the European Parliament and of the Council of 27 November 2019 on the prudential requirements of investment firms and amending Regulations (EU) No 1093/2010, (EU) No 575/2013, (EU) No 600/2014 and (EU) No 806/2014 (OJ L 314, 5.12.2019, p. 1). 42Directive (EU) 2019/2034 of the European Parliament and of the Council of 27 November 2019 on the prudential supervision of investment firms and amending Directives 2002/87/EC, 2009/65/EC, 2011/61/EU, 2013/36/EU, 2014/59/EU and 2014/65/EU (OJ L 314, 5.12.2019, p. 64).
Amendment 32 #
Proposal for a directive
Recital 4
Recital 4
(4) In its resolution on sustainable finance of 29 May 201843 , the European Parliament called for the further development of non-financial reporting requirements in the framework of Directive 2013/34/EU. In its resolution on sustainable corporate governance of 17 December 202044 , the European Parliament welcomed the Commission’s commitment to review Directive 2013/34/EU and expressed the need to set up a comprehensive Union framework on non-financial reporting that contains mandatory Union non-financial reporting standards. The European Parliament called for the expansion of the scope of the reporting requirements to additional categories of undertakings and for the introduction of an audit requirement. , for the identification of high-risk sectors of economic activity with a significant impact on sustainability matters that could justify the inclusion of small and medium sized enterprises (SMEs), and for the introduction of an audit requirement. Furthermore, the resolution called for a sustainability approach that would imply that companies should give due consideration and respect for the planetary boundaries, in order to address the most pressing risks posed by their activities. __________________ 43 2018/2007(INI). 43 44 A9-0240/2020 (INI). 44
Amendment 33 #
Proposal for a directive
Recital 4 a (new)
Recital 4 a (new)
(4a) The list of high risk sector which is included in annex of Directive 2013/34/EU is based on and inspired by the NACE Codes and build on four types of sources and evidence existing EU legislation, scientific evidence and data about sectors that can create particularly high levels of environmental or social harm, sectors that are already considered “high-risk” under international standards and sectors that are already considered “high-risk” under market or business initiatives.
Amendment 36 #
Proposal for a directive
Recital 6
Recital 6
(6) Directive 2014/95/EU of the European Parliament and the Council47 amended Directive 2013/34/EU as regards disclosure of non-financial information by certain large undertakings and groups. Directive 2014/95/EU introduced a requirement on undertakings to report information on, as a minimum, environmental, social and employee matters, respect for human rights, and anti- corruption and bribery matters. With regard to these topics, Directive 2014/95/EU required undertakings to disclose information under the following reporting areas: business model, policies (including due diligence processes implemented), the outcome of the policies, risks and risk management, and key performance indicators, including sales of products that are relevant to the business's profitability. __________________ 47 Directive 2014/95/EU of the European Parliament and of the Council of 22 October 2014 amending Directive 2013/34/EU as regards disclosure of non- financial and diversity information by certain large undertakings and groups (OJ L 330, 15.11.2014, p. 1).
Amendment 38 #
Proposal for a directive
Recital 8
Recital 8
(8) The ultimate beneficiaries of better sustainability reporting by undertakings armust be individual citizens and savers. Savers who want to invest ethically and sustainably willmust have the opportunity to do so, while all citizens shouldwill benefit from a stable, 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 investments and the impacts of those investments on people and the environment. The second group of users consists of organisations, including non- governmental organisations, civil society 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 to foster the comparability across market sectors on the basis of environmental merits, corporate entities should disclose the degree to which they contribute to economic activities that qualify as environmentally sustainable pursuant to Article 3 of Regulation (EU) 2020/852 on Sustainable Finance Taxonomy and fully respect the ‘do no significant harm principle pursuant to Article 17 of Regulation (EU) 2020/852. 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 supply and value chains. PExperts, policy makers and environmental agencies may use such information, in particular on an aggregate basis, to monitor, verify and compare environmental, climate and social data trends, to contribute to environmental accounts, 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. There is an urgent need to make this data readily available at a reasonable cost. Many investors and asset managers purchase sustainability information from third party data providers, who collect information from various sources, including public corporate reports.
Amendment 44 #
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 and civil society. 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 and the risks and opportunities associated with our planetary boundaries. Awareness of the risks and opportunities to undertakings and to investments resulting from other environmental and climate 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 ethical investment products that explicitly seek to meet certain sustainability standards or achieve certain sustainability objectives and ensure coherence with the ambition of the Paris Agreement and Union policies as well as achieving a balance between the three pillars of sustainability, including the environment, climate, biodiversity, public health and the economy. 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 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 48 #
Proposal for a directive
Recital 11
Recital 11
(11) The report on the review clause of the Non-Financial Reporting Directive (Directive 2014/95/EU), and its accompanying fitness check on corporate reporting, identified problems as to the effectiveness of that Directive48 . There is significant evidence that many undertakings do not disclose material information on all major sustainability- related topics, especially climate-related information, including emissions generated from agricultural livestock and corporate sales of pesticides, fertilisers and antibiotics. The report also identified as significant problems the limited comparability and reliability of sustainability information. Additionally, many undertakings from which users need sustainability information are not obliged to report such information which underlines the need for a robust and affordable monitoring, reporting and verification framework and effective auditing within corporate sustainability reporting to ensure the reliability of data and avoid off-setting, greenwashing and/or double accounting. __________________ 48 Publication office: please insert reference to Report from the Commission to the European Parliament, the Council and the European Economic and Social Committee on the review clauses in Directives 2013/34/EU, 2014/95/EU, and 2013/50/EU, and accompanying SWD- Fitness Check.
Amendment 51 #
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 and the objectives of the Paris Agreement. Non- governmental organisations, social partners, communities affected by undertakings’ activities, and other stakeholders are less able to hold undertakings accountable for their impacts on people and, the environment, the climate and more generally on all planetary boundaries. 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 sustainability information also limits the ability of stakeholders to enter into dialogue with undertakings on climate related and sustainability matters. 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 55 #
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 sustainability information. In addition, all undertakings that are parent undertakings of large groups should prepare sustainability reporting at group level.
Amendment 55 #
Proposal for a directive
Recital 2
Recital 2
(2) In its Action Plan: Financing Sustainable Growth the Commission set out measures to achieve the following objectives: reorient capital flows towards sustainable investment in order to achieve sustainable and inclusive growth, manage financial risks stemming from climate change, resource depletion, environmental degradation and social issues, and foster transparency and long-termism in financial and economic activity33 . The disclosure by undertakings of relevant, comparable and reliable sustainability information is a prerequisite for meeting those objectives. In its Guidelines on reporting climate- related information, the European Commission highlighted the benefits for companies to report on climate related information particularly by increasing awareness and understanding of climate related risks and opportunities within the company, diversifying investor base, creating a lower cost of capital and by improving constructive dialogue with all stakeholders. The European Parliament and the Council adopted a number of legislative acts as part of the implementation of the Action Plan on Financing Sustainable Growth. Regulation (EU) 2019/2088 of the European Parliament and of the Council34 governs how financial market participants and financial advisers are to disclose sustainability information to end investors and asset owners. Regulation (EU) 2020/852 of the European Parliament and of the Council35 creates a classification system of environmentally sustainable economic activities with the aim of scaling up sustainable investments and combatting greenwashing of financial products that unduly claim to be sustainable. Regulation (EU) 2019/2089 of the European Parliament and of the Council36 , complemented by Commission Delegated Regulations (EU) 2020/181637 , (EU) 2020/181738 and (EU) 2020/181839 , introduces environmental, social and governance (‘ESG’) disclosure requirements for benchmarks administrators and minimum standards for the construction of EU Climate Transition Benchmarks and EU Paris-aligned Benchmarks. Regulation (EU) No 575/2013 of the European Parliament and of the Council40 requires large institutions which have issued securities that are admitted to trading on a regulated market to disclose information on ESG risks from 28 June 2022. The new prudential framework for investment firms set by Regulation (EU) 2019/2033 of the European Parliament and of the Council41 and Directive (EU) 2019/2034 of the European Parliament and of the Council42 contains provisions concerning the introduction of an ESG risk dimension in the supervisory review and evaluation process (SREP) by competent authorities, and contains ESG risks disclosure requirements for investment firms, applicable from 26 December 2022. The Commission has also announced a proposal on a European Green Bond Standard in its Work Programme for 2021, following up on the Action Plan on Financing Sustainable Growth. _________________ 33 COM(2018) 97 final. 34 Regulation (EU) 2019/2088 of the European Parliament and of the Council of 27 November 2019 on sustainability‐related disclosures in the financial services sector (OJ L 317, 9.12.2019, p. 1). 35 Regulation (EU) 2020/852 of the European Parliament and of the Council of 18 June 2020 on the establishment of a framework to facilitate sustainable investment, and amending Regulation (EU) 2019/2088 (OJ L 198, 22.6.2020, p. 13). 36 Regulation (EU) 2019/2089 of the European Parliament and of the Council of 27 November 2019 amending Regulation (EU) 2016/1011 as regards EU Climate Transition Benchmarks, EU Paris-aligned Benchmarks and sustainability-related disclosures for benchmarks (OJ L 317, 9.12.2019, p. 17). 37 Commission Delegated Regulation (EU) 2020/1816 of 17 July 2020 supplementing Regulation (EU) 2016/1011 of the European Parliament and of the Council as regards the explanation in the benchmark statement of how environmental, social and governance factors are reflected in each benchmark provided and published (OJ L 406, 3.12.2020, p. 1). 38 Commission Delegated Regulation (EU) 2020/1817 of 17 July 2020 supplementing Regulation (EU) 2016/1011 of the European Parliament and of the Council as regards the minimum content of the explanation on how environmental, social and governance factors are reflected in the benchmark methodology (OJ L 406, 3.12.2020, p. 12). 39 Commission Delegated Regulation (EU) 2020/1818 of 17 July 2020 supplementing Regulation (EU) 2016/1011 of the European Parliament and of the Council as regards minimum standards for EU Climate Transition Benchmarks and EU Paris-aligned Benchmarks (OJ L 406, 3.12.2020, p. 17). 40 Regulation (EU) No 575/2013 of the European Parliament and of the Council of 26 June 2013 on prudential requirements for credit institutions and investment firms and amending Regulation (EU) No 648/2012 (OJ L 176, 27.6.2013, p. 1). 41 Regulation (EU) 2019/2033 of the European Parliament and of the Council of 27 November 2019 on the prudential requirements of investment firms and amending Regulations (EU) No 1093/2010, (EU) No 575/2013, (EU) No 600/2014 and (EU) No 806/2014 (OJ L 314, 5.12.2019, p. 1). 42 Directive (EU) 2019/2034 of the European Parliament and of the Council of 27 November 2019 on the prudential supervision of investment firms and amending Directives 2002/87/EC, 2009/65/EC, 2011/61/EU, 2013/36/EU, 2014/59/EU and 2014/65/EU (OJ L 314, 5.12.2019, p. 64).
Amendment 57 #
Proposal for a directive
Recital 16
Recital 16
(16) The requirement that also large non- listed undertakings should disclose information on sustainability matters is mainly driven by concerns about the impacts and accountability of such undertakings, including through their supply and value chain. In this respect, all large undertakings should be subject to the same requirements to report sustainability information publicly. In addition, financial market participants also need information from those large non-listed undertakings.
Amendment 57 #
Proposal for a directive
Recital 4
Recital 4
(4) In its resolution on sustainable finance of 29 May 201843 , the European Parliament called for the further development of non-financial reporting requirements in the framework of Directive 2013/34/EU. In its resolution on sustainable corporate governance of 17 December 202044 , the European Parliament welcomed the Commission’s commitment to review Directive 2013/34/EU and expressed the need to set up a comprehensive Union framework on non-financial reporting that contains mandatory Union non-financial reporting standards. The European Parliament called for the expansion of the scope of the reporting requirements to additional categories of undertakings and for the introduction of an audit requirementfor the identification of high-risk sectors of economic activity with a significant impact on sustainability matters that could justify the inclusion of small and medium sized enterprises (SMEs), and for the introduction of an audit requirement. Furthermore, the resolution called for a sustainability approach that would imply that companies should give due consideration and respect for the planetary boundaries, in order to address the most pressing risks posed by their activities. _________________ 43 2018/2007(INI). 44 A9-0240/2020 (INI).
Amendment 58 #
Proposal for a directive
Recital 17
Recital 17
(17) The requirement that undertakings not established in the Union but with securities listed on regulated markets or undertakings that are established in the Union but listed on markets outside the EU should also disclose information on sustainability matters responds to the needs of financial market participants for information from such undertakings in order to understand the risks and impacts of their investments, and to comply with the disclosure requirements laid down in Regulation (EU) 2019/2088.
Amendment 58 #
Proposal for a directive
Recital 4 a (new)
Recital 4 a (new)
(4a) The list of high risk sector included in annex IIa of Directive 2013/34/EU is based on and inspired by the NACE Codes and build on four types of sources and evidence, namely: (1) existing EU legislation, (2) scientific evidence and data about sectors that can create particularly high levels of environmental or social harm, (3) sectors that are already considered “high-risk” under international standards and (4) sectors that are already considered “high- risk” under market or business initiatives.
Amendment 59 #
Proposal for a directive
Recital 6
Recital 6
(6) Directive 2014/95/EU of the European Parliament and the Council47 amended Directive 2013/34/EU as regards disclosure of non-financial information by certain large undertakings and groups. Directive 2014/95/EU introduced a requirement on undertakings to report information on, as a minimum, environmental, social and employee matters, respect for human rights, and anti- corruption and bribery matters. With regard to these topics, Directive 2014/95/EU required undertakings to disclose information under the following reporting areas: business model, policies (including due diligence processes implemented), the outcome of the policies, risks and risk management, and key performance indicators including sales of products that are relevant to the business’s profitability. _________________ 47 Directive 2014/95/EU of the European Parliament and of the Council of 22 October 2014 amending Directive 2013/34/EU as regards disclosure of non- financial and diversity information by certain large undertakings and groups (OJ L 330, 15.11.2014, p. 1).
Amendment 60 #
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 protectionrepresented over 99% of undertakings in the Union and employ 65% of all employees in the EU market, in order to ensure investor protection and also to achieve the Union's ambitious environmental, climate and social objectives, it is appropriate to require that also those SMEs disclose information on sustainability matters. The reporting standards are not only necessary but also useful and constitute an opportunity for companies to demonstrate their commitment to the ecological and social transition and to establish leading standards and thereby feed into their competitive advantage. The introduction of this requirement will help to ensure that financial market participants can include smaller listand medium sized 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 and to put an equal footing, all undertakings concerning sustainability reporting standards as well as management reporting regardless of their size. 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. TheySMEs should also be given the possibility to report according to standards that are proportionate to the capacities and resources of SMEs. NThere must be a timeline for non- listed SMEs can also choose to useto apply 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 supply and value chains.
Amendment 60 #
Proposal for a directive
Recital 8
Recital 8
(8) The ultimate beneficiaries of better sustainability reporting by undertakings armust be individual citizens and savers. Savers who want to invest ethically and sustainably willmust have the opportunity to do so, while all citizens should benefit from a stable, 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 investments and the impacts of those investments on people and the environment. The second group of users consists of organisationcivil society actors, including non- governmental organisations 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 to foster the comparability across market sectors on the basis of environmental merits, corporate entities should disclose the degree to which they contribute to economic activities that qualify as environmentally sustainable pursuant to Article 3 of Regulation (EU) 2020/852 on Sustainable Finance Taxonomy and fully respect the ‘do no significant harm principle pursuant to Article 17 of Regulation (EU) 2020/852. 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 supply and value chains. Experts, Policy makers and environmental agencies may use such information, in particular on an aggregate basis, to monitor, verify and compare environmental, climate and social data and trends, to contribute to environmental accounts, 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. There is an urgent need to make this data readily available and free of charge. Many investors and asset managers purchase sustainability information from third party data providers, who collect information from various sources, including public corporate reports.
Amendment 64 #
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 and civil society. 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 and the risks and opportunities associated with our planetary boundaries. Awareness of the risks and opportunities to undertakings and to investments resulting from other environmental and climate 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 ethical investment products that explicitly seek to meet certain sustainability standards or achieve certain sustainability objectives and ensure coherence with the ambition of the Paris Agreement and Union policies as well as achieving a balance between the three pillars of sustainability, including the environment, climate, biodiversity, public health and the economy. 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 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 65 #
Proposal for a directive
Recital 19
Recital 19
(19) Directive 2004/109/EC of the European Parliament and of the Council49 applies to all undertakings with securities listed on regulated and SMEs growth markets. In order to ensure that all undertakings with securities listed on regulated markets, including third country issuers, fall under the same sustainability reporting requirements, Directive 2004/109/EC should contain the necessary cross-references to any requirement on sustainability reporting in the annual financial report. __________________ 49 Directive 2004/109/EC of the European Parliament and of the Council of 15 December 2004 on the harmonisation of transparency requirements in relation to information about issuers whose securities are admitted to trading on a regulated market and amending Directive 2001/34/EC (OJ L 390, 31.12.2004, p. 38).
Amendment 66 #
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, 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 level. It is therefore necessary to require those subsidiary undertakings to publish the consolidated management report of their parent undertaking and to include a reference in their management report to the fact that they are exempted from reporting sustainability information. That exemption should also apply where the parent undertaking reporting at consolidated level is a third country undertaking reporting sustainability information in accordance with the requirements of this Directive or in a manner equivalent to EU sustainability reporting standard including with regards to subsidiaries.
Amendment 66 #
Proposal for a directive
Recital 11
Recital 11
(11) The report on the review clause of the Non-Financial Reporting Directive (Directive 2014/95/EU), and its accompanying fitness check on corporate reporting, identified problems as to the effectiveness of that Directive48 . There is significant evidence that many undertakings do not disclose material information on all major sustainability- related topics, including climate-related information, emissions generated from agricultural livestock and corporate sales of pesticides, fertilisers and antibiotics. The report also identified as significant problems the limited comparability and reliability of sustainability information. Additionally, many undertakings from which users need sustainability information are not obliged to report such information which underlines the need for a robust and affordable monitoring, reporting and verification framework and effective auditing within corporate sustainability reporting to ensure the reliability of data and avoid off-setting, greenwashing and/or double accounting. _________________ 48 Publication office: please insert reference to Report from the Commission to the European Parliament, the Council and the European Economic and Social Committee on the review clauses in Directives 2013/34/EU, 2014/95/EU, and 2013/50/EU, and accompanying SWD- Fitness Check.
Amendment 68 #
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 and the objectives of the Paris Agreement. Non- governmental organisations, social partners, communities affected by undertakings’ activities, and other stakeholders are less able to hold undertakings accountable for their impacts on people and, the environment, the climate and more generally on all planetary boundaries. 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. The lack of sustainability information also limits the ability of stakeholders, including civil society actors and trade unions, to enter into dialogue with undertakings on sustainability matters.
Amendment 69 #
Proposal for a directive
Recital 25
Recital 25
(25) Articles 19a and 29a of Directive 2013/34/EU require reporting not only on information ‘to the extent necessary for an understanding of the undertaking's development, performance, position’, but also on information necessary for an understanding of the impact of the undertaking’s activities on environmental, socialclimate-related, social, gender equality and employee matters, respect for human rights, anti-corruption and bribery matters. Those articles therefore require undertakings to report both on how various sustainability matters affect the undertaking, and on the impacts of the activities of the undertaking on people and the environment. That is referred to as the double-materiality perspective, in which the risks to the undertaking and the impacts of the undertaking each represent one materiality perspective. The fitness check on corporate reporting shows that those two perspectives are often not well understood or applied. It is therefore necessary to clarify that undertakings should consider each materiality perspective in its own right, and should disclose information that is material from both perspectives as well as information that is material from only one perspective.
Amendment 70 #
Proposal for a directive
Recital 26
Recital 26
(26) Articles 19a(1) and 29a(1) of Directive 2013/34/EU require undertakings to disclose information about five reporting areas: business model, policies (including due diligence processes implemented), the outcome of those policies, risks and risk management, and key performance indicators relevant to the business. Article 19a(1) of Directive 2013/34/EU does not contain explicit references to other reporting areas that users of information consider relevant, some of which align with disclosures included in international frameworks, including the recommendations of the Task Force on Climate-related Financial Disclosures. Disclosure requirements shouldmust be specified in sufficient detail to ensure that undertakings report information on their resilience to risks related to sustainability matters. In addition to the reporting areas identified in Articles 19a(1) and 29a(1) of Directive 2013/34/EU, undertakings should therefore be required to disclose information about their business strategy and the resilience of the business model and strategy to risks related to sustainability matters, any plans they may have to ensure that their business model and strategy are compatible with the transition to a sustainable and climate- neutral economy and should include information on planetary boundaries and in particular on climate, deforestation, ecological and ecosystems health, biodiversity restoration, soil health and degradation, carbon farming practices including the restoration of peatland areas, manure and nutrient management, as well as information concerning the reduction of pesticides, fertilisers and antibiotics sales or use; whether and how their business model and strategy take account of the interests of stakeholders; any opportunities for the undertaking arising from sustainability matters; the implementation of the aspects of the business strategy which affect, or are affected by sustainability matters; any sustainability targets set by the undertaking and the progress made towards achieving them; the role of the board and management with regard to sustainability matters; the principal actual and potential adverse impacts connected with the undertaking’s activities; and how the undertaking has identified the information that they report on. Once the disclosure of elements such as targets and the progress towards achieving them is required, the separate requirement to disclose the outcomes of policies is no longer necessary.
Amendment 72 #
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 sustainability information. In addition, all undertakings that are parent undertakings of large groups should also prepare sustainability reporting at group level.
Amendment 78 #
Proposal for a directive
Recital 16
Recital 16
(16) The requirement that also large non-listed undertakings should disclose information on sustainability matters is mainly driven by concerns about the impacts and accountability of such undertakings, including through their supply and value chain. In this respect, all large undertakings should be subject to the same requirements to report sustainability information publicly. In addition, financial market participants also need information from those large non-listed undertakings.
Amendment 79 #
Proposal for a directive
Recital 28
Recital 28
(28) Directive 2013/34/EU does not require the disclosure of information on intangibles other than intangible assets recognised in the balance sheet. It is widely recognised that information on intangible assets and other intangible factors, including internally-generated intangibles, is underreported, impeding the proper assessment of an undertaking’s development, performance and position and monitoring of investments. To enable investors to better understand the increasing gap between the accounting book value of many undertakings and their market valuation, which is observed in many sectors of the economy, adequate reporting on intangibles should be required. It is therefore necessary to require undertakings to disclose information on intangibles other than intangible assets recognised in the balance sheet, including intellectual capital, human capital, including skills development, and social and relationship capital, including reputation capital. Information on intangibles should also include information related to research and development as well as any profits generated on intangible property.
Amendment 81 #
Proposal for a directive
Recital 16 c (new)
Recital 16 c (new)
(16c) The requirement that small and medium-sized undertakings operating in high-risk areas should also disclose information on sustainability matters responds to the higher likelihood and greater risk of adverse sustainability impacts in specific geographical areas. A high-risk area is an area that is associated, as a result of its social, political, geopolitical or environmental characteristics, with a high likelihood of actual or potential severe impacts on the environment or people. High-risk areas include conflict-affected areas, areas with low social and environmental protection and areas affected by systemic or recurring human rights violations or environmental damages.
Amendment 82 #
Proposal for a directive
Recital 32
Recital 32
(32) Undertakings under the scope of Articles 19a(1) and 29a(1) of Directive 2013/34/EU may rely on national, Union- based or international reporting frameworks, and where they do so, they have to specify which frameworks they relied upon. However, Directive 2013/34/EU does not require undertakings to use a common reporting framework or standard, and it does not prevent undertakings from choosing not to use any reporting framework or standards at all. As required by Article 2 of Directive 2014/95/EU, the Commission published in 2017 non-binding guidelines for undertakings under the scope of that Directive52 . In 2019, the Commission published additional guidelines, specifically on reporting climate-related information53 . The climate reporting guidelines explicitly incorporated the recommendations of the Task Force on Climate-related Financial Disclosures. Available evidence indicates that those non-binding guidelines did not have a significant impact on the quality of non- financial reporting by undertakings under the scope of Articles 19a and 29a of Directive 2013/34/EU. The voluntary nature of the guidelines means that undertakings are free to apply them or not. The guidelines can therefore not ensure on their own the comparability of, reliability and sincerity of the information disclosed by different undertakings or the disclosure of all information that users consider relevant. That is why there is a need for mandatory common reporting standards to ensure that information is comparable, reliable and sincere and that all relevant information is disclosed. Building on the double- materiality principle, standards should cover all information that is material to users. Common reporting standards are also necessary to enable the audit and digitalisation of sustainability reporting and to facilitate its supervision and enforcement. The development of mandatory common sustainability reporting standards is necessary to progress to a situation in which sustainability information has a status comparable to that of financial information. __________________ 52Communication from the Commission Guidelines on non-financial reporting (methodology for reporting non-financial information) (C/2017/4234). 53Communication from the Commission Guidelines on non-financial reporting: Supplement on reporting climate-related information (C/2019/4490).
Amendment 82 #
Proposal for a directive
Recital 16 d (new)
Recital 16 d (new)
(16d) A list of high-risk areas is established in Annex II of this Directive. The European Commission should review and modify the list of high-risk sectors by adopting delegated act when necessary and at least every three years. This list should be based on existing legislation and guidelines of the European Union, reports of international organisations, international reporting standards, reliable and scientific evidence of higher risks of environmental and social harm. When designing and reviewing the list of high risk-sectors, the European Commission should conduct the necessary consultations with independent experts with due respect to the “Better lawmaking” interinstitutional agreement of the 13th of April 2016. In particular, it should guarantee the equal participation of the European Parliament and of the European Council in preparing the delegated acts. The European Parliament and of the European Council should have access to all documents and all the European Commission’s expert groups’ meetings. It should be reviewed and modified as appropriate and at least every three years.
Amendment 83 #
Proposal for a directive
Recital 17
Recital 17
(17) The requirement that undertakings not established in the Union but with securities listed on regulated markets or undertakings that are established in the Union but listed on markets outside the EU should also disclose information on sustainability matters responds to the needs of financial market participants for information from such undertakings in order to understand the risks and impacts of their investments, and to comply with the disclosure requirements laid down in Regulation (EU) 2019/2088.
Amendment 86 #
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 developed with the expertise of relevant stakeholders. 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 FinanceCommission should establish an independent and public technical advisory body that serves the public interest by providing advice to the Commission on corporate sustainable reporting, thereby taking over this role from EFRAG. When adopting sustainability reporting standards, the Commission should take account of technical advice that this independent and public advisory body 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, the independent and public advisory body’s technical advice should be developed with proper due process, public oversight and transparency, accompanied by cost benefit analyses, and be developed with the expertise of relevant stakeholders. 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. 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 all relevant EU bodies, including the European Securities and Markets Authority (ESMA), the European Banking Authority, the European Insurance and Occupational Pensions Authority, the European Environment Agency, the European Union Agency for Fundamental Rights, the Aarhus Convention Compliance Committee, the European Central Bank, the Committee of European Auditing Oversight Bodies and the Platform on Sustainable Finance, as well as all other relevant stakeholders including civil society organisations, 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 88 #
Proposal for a directive
Recital 36
Recital 36
(36) Sustainability reporting standards should take account of the Commission guidelines on non-financial reporting60 and the Commission guidelines on reporting climate-related information61 . They should also take account of other reporting requirements in Directive 2013/34/EU in particular, reporting on payments to governments by undertakings active in the extractive and logging industries, as well as other reporting requirements not directly related to sustainability, with the aim of providing the users of the reported information with a better understanding of the development, performance, position and the environmental impact of the undertaking, by maximising the links between the sustainability information and other information reported in accordance with Directive 2013/34/EU. __________________ 60 2017/C 215/01. 61 2019/C 209/01.
Amendment 91 #
Proposal for a directive
Recital 37
Recital 37
(37) Sustainability reporting standards should be proportionate, and should not impose unnecessary administrative burden on companies that are required to use them. In order to minimise disruption for undertakings that already report sustainability information, sustainability reporting standards should take account of existing standards and frameworks for sustainability reporting and accounting where appropriate. Those include the Global Reporting Initiative, the Sustainability Accounting Standards Board, the International Integrated Reporting Council, the International Accounting Standards Board, the Task Force on Climate-related Financial Disclosures, the Carbon Disclosure Standards Board, and CDP (formerly the Carbon Disclosure Project), and the GHG Protocol in the calculation of GHG emissions from undertakings, and including emissions generated from industrial livestock production. Standards of the European Union should take account of any sustainability reporting standards developed under the auspices of International Financial Reporting Standards Foundation. To avoid unnecessary regulatory fragmentation that may have negative consequences for undertakings operating globally, European standards should contribute to the process of convergence of sustainability reporting standards at global level.
Amendment 91 #
Proposal for a directive
Recital 18
Recital 18
(18) Considering the growingThe relevance of sustainability- related risks and taking into account thatis growing and 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 protectionrepresent over 99 per cent of undertakings and employ 65 per cent of all employees in the Union. Therefore, in order to ensure investor protection and positive social and environmental impacts of their business operations as well as to achieve the Union’s ambitious environmental, climate and social objectives, it is appropriate to require that also those SMEs disclose information on sustainability matters. The reporting standards are not only necessary but also useful and constitute an opportunity for companies to demonstrate their commitment to the ecological and social transition and the establishment of leading standards and thereby feed into their competitive advantage. 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 and to put an equal footing, all undertakings concerning sustainability reporting standards as well as management reporting regardless of their size. 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- listed SMEs can also choose to use these proportionate. They should also be given the possibility to report on the sustainability standards oin 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 coulway and format that is proportionate to the capacities and reasonably request from SME suppliers and clients in their value chainurces of SMEs.
Amendment 94 #
Proposal for a directive
Recital 19
Recital 19
(19) Directive 2004/109/EC of the European Parliament and of the Council49 applies to all undertakings with securities listed on regulated markets and SME growth markets. In order to ensure that all undertakings with securities listed on regulated markets, including third country issuers, fall under the same sustainability reporting requirements, Directive 2004/109/EC should contain the necessary cross-references to any requirement on sustainability reporting in the annual financial report. _________________ 49 Directive 2004/109/EC of the European Parliament and of the Council of 15 December 2004 on the harmonisation of transparency requirements in relation to information about issuers whose securities are admitted to trading on a regulated market and amending Directive 2001/34/EC (OJ L 390, 31.12.2004, p. 38).
Amendment 96 #
Proposal for a directive
Recital 38
Recital 38
Amendment 97 #
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, 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 level. It is therefore necessary to require those subsidiary undertakings to publish the consolidated management report of their parent undertaking and to include a reference in their management report to the fact that they are exempted from reporting sustainability information. That exemption should also apply where the parent undertaking reporting at consolidated level is a third country undertaking reporting sustainability information in accordance with the requirements of this Directive or in a manner equivalent to EU sustainability reporting standardincluding with regard to subsidiaries.
Amendment 100 #
Proposal for a directive
Recital 40
Recital 40
(40) It should be ensured that the information reported by undertakings in accordance with the sustainability reporting standards meet the needs of users. The reporting standards should therefore specify the information that undertakings are to disclose on all major environmental factors, including their impacts and dependencies on climate, air, land, water and, biodiversity and all nine of the planetary boundaries. Regulation (EU) 2020/852 provides a classification of the environmental objectives of the Union. For reasons of coherence, it is appropriatenecessary to use a similar classification to identify the environmental factors that should be addressed by sustainability reporting standards. The reporting standards should consider and specify any geographical or other contextual information that undertakings should disclose to provide an understanding of their principal impacts on sustainability matters and the principal risks to the undertaking arising from sustainability matters.
Amendment 102 #
Proposal for a directive
Recital 41
Recital 41
(41) With regard to climate-related information, users and consumers are interested in knowing about undertakings’ physical and transitional risks, and opportunities about their resilience to different climate scenarios. They are also interested in the level and scope of greenhouse gas emissions and removals attributed to the undertaking, including the extent to which the undertaking uses offsets and the source of those offsets. Achieving a climate neutral economy requires the alignment of greenhouse gas accounting and offset standards. Users need reliable information regarding offsets that addresses concerns regarding possible double-counting and overestimations, given the risks to the achievement of climate-related targets that double-counting and overestimations can createThese parties are also interested to know the efforts made by companies to effectively reduce absolute GHG emissions as part of their climate mitigation and adaption strategies. The reporting standards should therefore specify the information undertakings should report with regard to those matters.
Amendment 104 #
Proposal for a directive
Recital 42
Recital 42
(42) Achieving a climate neutral and circular economy and a toxic-free environment, without any diffuse pollution requires the full mobilisation of all economic sectors. Reducing energy use and increasing energy efficiency is key in this respect as energy is used across supply chains. Energy aspects should therefore be duly considered in sustainability reporting standards, in particular in relation to environmental and climate related matters.
Amendment 106 #
Proposal for a directive
Recital 43
Recital 43
(43) Sustainability reporting standards should specify the information that undertakings should disclose on social, climate and environmental factors, including employee factors and human rights. Such information should cover the impacts of undertakings on people, including on human health and the environment as part of a 'One Health' approach. The information that undertakings disclose about human and environmental rights should include information about forced labour in their value chains where relevant, conflict minerals and exposure to environmental risks, including industrial emissions, industrial pollution and accidents in their supply and value 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, 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. These requirements should also take into account the European Convention on Human Rights and its additional protocols and international environmental and human rights principles and instruments such as the UNECE convention on access to information, public participation in decision making and access to justice in environmental matters (Aarhus Convention), Resolution 48/13 adopted by the Human Rights Council on 8 October 2021 on the human right to a clean, healthy and sustainable environment, as well as international climate commitments, especially those outlined in the 2018 IPCC Special Report on 1.5 degrees.
Amendment 107 #
Proposal for a directive
Recital 24 a (new)
Recital 24 a (new)
(24a) To enable the use of corporate sustainability information defined in this Directive for incentives in the context of the EU public procurement directives and State Aid measures, Directive 2013/34/EU should be amended to foresee an evaluation mechanism (including indicators) as part of the sustainability reporting that allows for a quantitative rating of the sustainability performance of undertakings.
Amendment 108 #
Proposal for a directive
Recital 25
Recital 25
(25) Articles 19a and 29a of Directive 2013/34/EU require reporting not only on information ‘to the extent necessary for an understanding of the undertaking's development, performance, position’, but also on information necessary for an understanding of the impact of the undertaking’s activities on environmental, social and employee mattersclimate-related, social and workers’ rights, gender equality, respect for human rights, anti-corruption and bribery matters. Those articles therefore require undertakings to report both on how various sustainability matters affect the undertaking, and on the impacts of the activities of the undertaking on people and the environment. That is referred to as the double-materiality perspective, in which the risks to the undertaking and the impacts of the undertaking each represent one materiality perspective. The fitness check on corporate reporting shows that those two perspectives are often not well understood or applied. It is therefore necessary to clarify that undertakings should consider each materiality perspective in its own right, and should disclose information that is material from both perspectives as well as information that is material from only one perspective.
Amendment 111 #
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 applicable to undertakings active in the extractive industry and the logging of forests should be consistent with reporting requirements of Chapter 10 of Directive 2013/34/EU and require sustainability disclosures to be made at project-level. Project-level disclosures are crucial for investors who need consistent and detailed information on projects to fully understand the impact of climate-related financial risk on the economic producibility of reserves in the fossil fuels sector and also to understand the resilience of supply of critical transition minerals. Project-level disclosure is equally crucial for communities affected by the extractive and logging industries and civil society organisations of resource-rich countries, to understand and scrutinize the benefits of the oil, gas, mining and logging industries and their environmental, social and governance impacts. 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.
Amendment 111 #
Proposal for a directive
Recital 26
Recital 26
(26) Articles 19a(1) and 29a(1) of Directive 2013/34/EU require undertakings to disclose information about five reporting areas: business model, policies (including due diligence processes implemented), the outcome of those policies, risks and risk management, and key performance indicators relevant to the business. Article 19a(1) of Directive 2013/34/EU does not contain explicit references to other reporting areas that users of information consider relevant, some of which align with disclosures included in international frameworks, including the recommendations of the Task Force on Climate-related Financial Disclosures. Disclosure requirements shouldmust be specified in sufficient detail to ensure that undertakings report information on their resilience to risks related to sustainability matters. In addition to the reporting areas identified in Articles 19a(1) and 29a(1) of Directive 2013/34/EU, undertakings should therefore be required to disclose information about their business strategy and the resilience of the business model and strategy to risks related to sustainability matters, any plans they may have to ensure that their business model and strategy are compatible with the transition to a sustainable and climate- neutral economy; whether and how their business model and strategy take account of the interests of stakeholder and should include information on planetary boundaries and in particular on climate, deforestation, ecological and ecosystems health, biodiversity restoration, soil health and degradation, carbon farming practices including the restoration of peatland areas, manure and nutrient management, as well as information concerning the reduction of pesticides, fertilisers and antibiotics sales or use; whether and how their business model and strategy respect and safeguard the rights and interests of stakeholders, including workers and communities; any opportunities for the undertaking arising from sustainability matters; the implementation of the aspects of the business strategy which affect, or are affected by sustainability matters; any sustainability targets set by the undertaking and the progress made towards achieving them; the role of the board and management with regard to sustainability matters; the principal actual and potential adverse impacts connected with the undertaking’s activities; and how the undertaking has identified the information that they report on. Once the disclosure of elements such as targets and the progress towards achieving them is required, the separate requirement to disclose the outcomes of policies is no longer necessary.
Amendment 113 #
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 sectors with high risks regarding 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.
Amendment 114 #
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 and, the OECD Due Diligence Guidance for Responsible Business Conduct, and the ILO Tripartite Declaration of Principles concerning Multinational Enterprises and Social Policy, 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 operations and activities include impacts directly caused by the undertaking, impacts to which the undertaking contributes, and impacts which are otherwise linked to the undertaking’s 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.
Amendment 117 #
Proposal for a directive
Recital 47 a (new)
Recital 47 a (new)
(47a) Undertakings in certain particularly emitting sectors such as extractive and fossil fuel industry, should take into account the relevant sectoral guidance from the IPCC and the International Energy Agency. Undertakings active in the extractive industry as defined in Article 41(1) of directive 2013/34/EU should thus be subject to additional sustainability disclosure requirements. These undertakings have high market capitalization, drive economic growth across the world and are an important source of government revenues in many countries. They also have exceptional sustainability impacts in terms of greenhouse gas emissions, pollution, biodiversity loss and human health. Extractive activities can also fuel corruption, conflict and threaten human rights when safeguards are not met or if projects are poorly managed. The fossil fuel industry is a major cause of climate change while the energy transition will transform the extractive industries, with a huge reduction in the production of fossil fuels and a massive increase in the exploitation of minerals needed for clean energy technology. European capital markets are exposed to climate-related risk - the vulnerability of coal, oil and gas companies is particularly pronounced.
Amendment 118 #
Proposal for a directive
Recital 28
Recital 28
(28) Directive 2013/34/EU does not require the disclosure of information on intangibles other than intangible assets recognised in the balance sheet. It is widely recognised that information on intangible assets and other intangible factors, including internally-generated intangibles, is underreported, impeding the proper assessment of an undertaking’s development, performance and position and monitoring of investments. To enable investors to better understand the increasing gap between the accounting book value of many undertakings and their market valuation, which is observed in many sectors of the economy, adequate reporting on intangibles should be required. It is therefore necessary to require undertakings to disclose information on intangibles other than intangible assets recognised in the balance sheet, including intellectual capital, human capital, including skills development, and social and relationship capital, including reputation capital. Information on intangibles should also include information related to research and development as well as any profits generated on intangible property.
Amendment 121 #
Proposal for a directive
Recital 47 b (new)
Recital 47 b (new)
(47b) Undertakings active in the extractive industry must be required to publish the contracts and other documents upon which these projects are based. Given the changes that will be wrought by the energy transition, availability of the terms governing resource extraction will be key to understanding how risk and reward will be shared between companies, communities and governments. According to the International Monetary Fund, contract transparency in the extractive industries has become a global norm, and the practice was made a requirement under the 2019 Extractive Industries Transparency Initiative standard—the main global standard for transparency in the extractive industries. There are already over 49 countries around the world that have disclosed contracts and at least 30 with laws requiring them to do so. Contract disclosure is supported by leading extractives industry companies and has been endorsed by private sector forums including the International Council on Mining and Metals. Leading development finance institutions including the World Bank’s IFC and MIGA already require private sector clients developing extractive resources to publish contracts. The EBRD has the same requirements for hydrocarbons development. The IMF, the UN, the International Bar Association and the OECD have endorsed the practice.
Amendment 125 #
Proposal for a directive
Recital 70 a (new)
Recital 70 a (new)
(70a) In its report on the review clause in Article 48 of Directive 2013/34/EU1a, the Commission concluded that the review highlights a number of weaknesses in reporting standards. These weaknesses include the identification of governments, project definition and joint ventures. With reporting to date, the right government entities cannot easily be identified and held to account. Sustainability objectives, including a stable investment climate in resource-rich countries, cannot be achieved if citizens are unable to hold specific government entities to account. Undertakings should be required to consistently report on projects which are based on ‘substantially interconnected’ legal agreements. Reporting on each project varies across companies, making it difficult to have a complete and consistent overview of projects involving several companies. Investors managing risk and citizens holding governments to account require consistency in the identification of projects involving substantially interconnected legal agreements in order to progress sustainability objectives. Improved reporting on joint ventures is needed given the prevalence of such structures in the oil, gas and mining industries. Without improved joint venture reporting, major payments to governments risk being hidden from view. Payments to governments for the purchase of oil, gas and minerals by undertakings active in physical trading are now a commonly recognized payment stream within the EITI framework and should be added as a payment category under article 41(5). __________________ 1aREPORT FROM THE COMMISSION TO THE EUROPEANPARLIAMENT, THE COUNCIL AND THE EUROPEAN ECONOMIC AND SOCIAL COMMITTEE on the review clauses in Directives 2013/34/EU, 2014/95/EU, and 2013/50/EU,COM/2021/199 final, 21 April 2021.
Amendment 125 #
Proposal for a directive
Recital 32
Recital 32
(32) Undertakings under the scope of Articles 19a(1) and 29a(1) of Directive 2013/34/EU may rely on national, Union- based or international reporting frameworks, and where they do so, they have to specify which frameworks they relied upon. However, Directive 2013/34/EU does not require undertakings to use a common reporting framework or standard, and it does not prevent undertakings from choosing not to use any reporting framework or standards at all. As required by Article 2 of Directive 2014/95/EU, the Commission published in 2017 non-binding guidelines for undertakings under the scope of that Directive52 . In 2019, the Commission published additional guidelines, specifically on reporting climate-related information53 . The climate reporting guidelines explicitly incorporated the recommendations of the Task Force on Climate-related Financial Disclosures. Available evidence indicates that those non-binding guidelines did not have a significant impact on the quality of non- financial reporting by undertakings under the scope of Articles 19a and 29a of Directive 2013/34/EU. The voluntary nature of the guidelines means that undertakings are free to apply them or not. The guidelines can therefore not ensure on their own the comparability, reliability and sincerity of the of information disclosed by different undertakings or the disclosure of all information that users consider relevant. That is why there is a need for mandatory common reporting standards to ensure that information is comparable, reliable and sincere and that all relevant information is disclosed. Building on the double- materiality principle, standards should cover all information that is material to users. Common reporting standards are also necessary to enable the audit and digitalisation of sustainability reporting and to facilitate its supervision and enforcement. The development of mandatory common sustainability reporting standards is necessary to progress to a situation in which sustainability information has a status comparable to that of financial information. _________________ 52 Communication from the Commission Guidelines on non-financial reporting (methodology for reporting non-financial information) (C/2017/4234). 53 Communication from the Commission Guidelines on non-financial reporting: Supplement on reporting climate-related information (C/2019/4490).
Amendment 130 #
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 developed with the expertise of relevant stakeholders. 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. _________________ 54 Regulation (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)(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,. 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. Taking into account however the expansion of the sustainability reporting standards following this Directive, the current composition of EFRAG and its restricting funding structure, there is a need to designate a European Sustainable Corporate Reporting Board (ESCRB) as a new independent and publically controlled advisory body to take over the advisory role on the sustainability reporting standards from EFRAG. Through its composition, funding and governance structure, the ESCRD should ensure that its positions and technical advice reflect balanced and quality input of experts from all different fields and representing all relevant stakeholders. It the ESCRB will have a tripartite structure with its members coming from (1) public authorities, (2)corporate representatives and (3) civil society, including trade unions. When adopting sustainability reporting standards, the Commission should take account of technical advice that the ESCRD 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, ESCRD’s technical advice should be developed with proper due process, public oversight and transparency, accompanied by cost benefit analyses, and be developed with the expertise of relevant stakeholders. To ensure coherence between corporate financial reporting standards and corporate sustainability reporting standards, the ESCRD and EFRAG should meet on a regular basis and develop a close cooperation. 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. In addition, the Commission should consult all relevant EU bodies, including the European Securities and Markets Authority, the European Banking Authority, the European Insurance and Occupational Pensions Authority, the European Environment Agency, the European Union Agency for Fundamental Rights, the European Foundation for the Improvement of Living and Working Conditions, the European Agency for Safety and Health at Work, the European Institute for Gender Equality, the European Central Bank, the Committee of European Auditing Oversight Bodies and the Platform on Sustainable Finance, as well as relevant stakeholders such as civil society organisations and trade unions, 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.
Amendment 131 #
Proposal for a directive
Article 1 – paragraph 1 – point 1
Article 1 – paragraph 1 – point 1
3a. A list of high-risk sectors is included in Annex IIa and shall be reviewed every three years by the European Commission and modified, as appropriate, through a Delegated Act. This review shall take into account existing EU sector-specific legislation and sector-specific disclosures in recognised international reporting frameworks such as the GRI, which address sector-specific environmental and social negative impacts;
Amendment 132 #
Proposal for a directive
Article 1 – paragraph 1 – point 2
Article 1 – paragraph 1 – point 2
Directive 2013/34/EU
Article 2 – paragraph 1 – point 18
Article 2 – paragraph 1 – point 18
(18) ‘sustainability reporting’ means reporting information related to sustainability matters in accordance with Articles 19a, 19d and 29a of this Directive; where the environmental matters shall be based on, and take account of underlying indicators and methodologies set out in Regulation (EU) 2020/852 and the delegated acts adopted pursuant to it.
Amendment 134 #
Proposal for a directive
Recital 36
Recital 36
(36) Sustainability reporting standards should take account of the Commission guidelines on non-financial reporting60 and the Commission guidelines on reporting climate-related information61 . They should also take account of other reporting requirements in Directive 2013/34/EU, including reporting on payments to governments by undertakings active in the extractive and logging industries, as well as other reporting requirements not directly related to sustainability, with the aim of providing the users of the reported information with a better understanding of the development, performance, position and environmental and social impact of the undertaking, by maximising the links between the sustainability information and other information reported in accordance with Directive 2013/34/EU. _________________ 60 2017/C 215/01. 61 2019/C 209/01.
Amendment 136 #
Proposal for a directive
Article 1 – paragraph 1 – point 2
Article 1 – paragraph 1 – point 2
Directive 2013/34/EU
Article 2 – paragraph 1 – point 20 a (new)
Article 2 – paragraph 1 – point 20 a (new)
(20a) 'high-risk sector' means a sector that is associated, as a result of its size, business and value or supply chain characteristics, with a high likelihood of actual or potential severe impacts on sustainability matters and is listed in Annex IIa.
Amendment 138 #
Proposal for a directive
Recital 37
Recital 37
(37) Sustainability reporting standards should be proportionate, and should not impose unnecessary administrative burden on companies that are required to use them. In order to minimise disruption for undertakings that already report sustainability information, sustainability reporting standards should take account of existing standards and frameworks for sustainability reporting and accounting where appropriate. Those include the Global Reporting Initiative, the Sustainability Accounting Standards Board, the International Integrated Reporting Council, the International Accounting Standards Board, the Task Force on Climate-related Financial Disclosures, the Carbon Disclosure Standards Board, and CDP (formerly the Carbon Disclosure Project) and the Greenhouse Gas Protocol in the calculation of greenhouse gas (GHG) emissions from undertakings, and including emissions generated from industrial livestock production. . Standards of the European Union should take account of any sustainability reporting standards developed under the auspices of International Financial Reporting Standards Foundation. To avoid unnecessary regulatory fragmentation that may have negative consequences for undertakings operating globally, European standards should contribute to the process of convergence of sustainability reporting standards at global level.
Amendment 140 #
Proposal for a directive
Recital 38
Recital 38
Amendment 142 #
Proposal for a directive
Article 1 – paragraph 1 – point 2
Article 1 – paragraph 1 – point 2
Directive 2013/34/EU
Article 2 – paragraph 1 – point 20 b (new)
Article 2 – paragraph 1 – point 20 b (new)
(20b) 'high-risk undertaking' means an undertaking active in one or more of the high-impact sectors listed in Annex IIa.
Amendment 143 #
Proposal for a directive
Recital 40
Recital 40
(40) It should be ensured that the information reported by undertakings in accordance with the sustainability reporting standards meet the needs of users. The reporting standards should therefore specify the information that undertakings are to disclose on all major environmental factors, including their impacts and dependencies on climate, air, land, water and, biodiversity and all nine planetary boundaries. Regulation (EU) 2020/852 provides a classification of the environmental objectives of the Union. For reasons of coherence, it is appropriatenecessary to use a similar classification to identify the environmental factors that should be addressed by sustainability reporting standards. The reporting standards should consider and specify any geographical or other contextual information that undertakings should disclose to provide an understanding of their principal impacts on sustainability matters and the principal risks to the undertaking arising from sustainability matters.
Amendment 145 #
Proposal for a directive
Article 1 – paragraph 1 – point 2
Article 1 – paragraph 1 – point 2
Directive 2013/34/EU
Article 2 – paragraph 1 – point 20 c (new)
Article 2 – paragraph 1 – point 20 c (new)
(20c) 'climate neutrality' and 'net-zero' mean a balance between anthropogenic greenhouse gas emissions by sources and removals by sinks to be reached by 2050, in accordance with the Article 2 of the Regulation (EU) 2021/1119 (“European Climate Law”).
Amendment 145 #
Proposal for a directive
Recital 41
Recital 41
(41) With regard to climate-related information, users, including consumers, are interested in knowing about undertakings’ physical and transition risks, and about their resilience to different climate scenarios. They are also interested in the level and scope of greenhouse gas emissions and removals attributed to the undertaking, including the extent to which the undertaking uses offsets and the source of those offsets. Achieving a climate neutral economy requires the alignment of greenhouse gas accounting and offset standards. Users need reliable information regarding offsets that addresses concerns regarding possible double-counting and overestimations, given the risks to the achievement of climate-related targets that double-counting and overestimations can createThese parties are also interested to know the efforts made by companies to effectively reduced absolute GHG emissions as part of their climate mitigation and adaption strategies. The reporting standards should therefore specify the information undertakings should report with regard to those matters.
Amendment 147 #
Proposal for a directive
Article 1 – paragraph 1 – point 2
Article 1 – paragraph 1 – point 2
Directive 2013/34/EU
Article 2 – paragraph 1 – point 20 d (new)
Article 2 – paragraph 1 – point 20 d (new)
(20d) ‘Science-based target’ is a target defined on the basis of conclusive scientific environmental evidence and with independent scientific validation, that when achieved by the undertaking ensures that the undertaking’s impacts, as specified in Article 19a, will be aligned with the sustainability goals and criteria of the European Union for the specific environmental issue. In the specific case of climate change mitigation, this means a target enabling alignment of the undertaking’s impacts on climate change with a 1.5°C climate scenario with no or limited overshoot as defined by the IPCC.
Amendment 147 #
Proposal for a directive
Recital 42
Recital 42
(42) Achieving a climate neutral and circular economy and a toxic-free environment without any diffuse pollution, requires the full mobilisation of all economic sectors. Reducing energy use and increasing energy efficiency is key in this respect as energy is used across supply chains. Energy aspects should therefore be duly considered in sustainability reporting standards, in particular in relation to environmental and climate related matters.
Amendment 148 #
Proposal for a directive
Article 1 – paragraph 1 – point 2
Article 1 – paragraph 1 – point 2
Directive 2013/34/EU
Article 2 – paragraph 1 – point 20 e (new)
Article 2 – paragraph 1 – point 20 e (new)
(20e) 'Severe impacts' are adverse impacts on people and the environment connected to the undertaking's value chain by its own operations, its products and services, its business relationships, its subsidiaries, and its supply chain, based on the gravity of the impact on the sustainability matter, the number of individuals that are or could be affected, or the scale of the damage to the environment or affected people to their prior state, cause the greatest harm relative to other impacts the undertaking has identified.
Amendment 148 #
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 labourundertaking should disclose country-by- country information regarding their workforce, working conditions, including wages per gender and per deciles, working hours, workers’ physical and psychological health and safety. It should also disclose information on social dialogue and workers’ representation. The information that undertakings disclose about human rights should include information about the impacts on human rights and workers’ rights in their value chains, including but not limited to forced labour and living wages in their value chains where relevant. 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, 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 149 #
Proposal for a directive
Article 1 – paragraph 1 – point 3
Article 1 – paragraph 1 – point 3
Directive 2013/34/EU
Article 19 a – paragraph 1
Article 19 a – paragraph 1
1. LAll 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), small and medium-sized high-impact undertakings, undertakings registered in a non-EU/EEA country with significant business in the EU, and undertakings organised as foundations or trusts or franchises meeting the size criteria for large undertakings in Directive 2013/34/EU 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 153 #
Proposal for a directive
Recital 44
Recital 44
(44) Users need information about governance factors, including information on the role of an undertaking’s administrative, management and supervisory bodies, including with regard to sustainability matters, the composition of such bodies, particularly with regard to workers' and women's participation, age, ethnicity and diversity aspects, and an undertaking’s internal control and risk management systems, including in relation to the reporting process. Users also need information about undertakings’ corporate culture and approach to business ethics, including anti-corruption and anti-bribery, and about their political engagements, including lobbying activities. Information about the management of the undertaking and the quality of relationships with business partners, including payment practices relating to the date or period for payment, the rate of interest for late payment or the compensation for recovery costs referred to in Directive 2011/7/EU of the European Parliament and of the Council62 on late payment in commercial transactions, helps users to understand an undertaking’s risks as well as its impacts on sustainability matters. Every year, thousands of businesses, especially SMEs, suffer administrative and financial burdens because they are paid late, or not at all. Ultimately, late payments lead to insolvency and bankruptcy, with destructive effects on entire value chains. Increasing information about payment practices should empower other undertakings to identify prompt and reliable payers, detect unfair payment practices, access information about the businesses they trade with, and negotiate fairer payment terms. _________________ 62 Directive 2011/7/EU of the European Parliament and of the Council of 16 February 2011 on combating late payment in commercial transactions (OJ L 48, 23.2.2011, p. 1).
Amendment 159 #
Proposal for a directive
Article 1 – paragraph 1 – point 3
Article 1 – paragraph 1 – point 3
Directive 2013/34/EU
Article 19 a – paragraph 2 – subparagraph 1 – point a
Article 19 a – paragraph 2 – subparagraph 1 – point a
(a) a brief description of the undertaking's business model and environmental strategy, including:
Amendment 160 #
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 applicable to undertakings active in the extractive industry and the logging of forests should be consistent with reporting requirements of Chapter 10 of Directive 2013/34/EU and require sustainability disclosures to be made at project-level. Project-level disclosures are crucial for investors who need consistent and detailed information on projects to fully understand the impact of climate-related financial risk on the economic producibility of reserves in the fossil fuels sector and also to understand the resilience of supply of critical transition minerals. Project-level disclosure is equally crucial for communities affected by the extractive and logging industries and civil society organisations of resource-rich countries, to understand and scrutinize the benefits of the oil, gas, mining and logging industries and their environmental, social and governance impacts. 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.
Amendment 161 #
Proposal for a directive
Article 1 – paragraph 1 – point 3
Article 1 – paragraph 1 – point 3
Directive 2013/34/EU
Article 19 a – paragraph 2 – subparagraph 1 – point a – point i
Article 19 a – paragraph 2 – subparagraph 1 – point a – point i
(i) the resilience of the undertaking's business model and strategy to risks related to sustainability matters in particular short, medium, and long-term risks associated with climate change in particular risks associated with: - The physical impacts of climate change; - The economic disruptions and security threats that result from the physical impacts of climate change; - The transition impacts and financial impacts that result as the global market moves towards a climate-neutral economy by at least 2050, including reputational impacts deriving from changing consumer behaviour; - The regulatory impacts caused by supranational, national and local governments efforts to limit global warming to 1.5 °C above pre-industrial levels with no or limited overshoot pursuant to the latest scientific evidence as provided by the IPCC;
Amendment 164 #
Proposal for a directive
Article 1 – paragraph 1 – point 3
Article 1 – paragraph 1 – point 3
Directive 2013/34/EU
Article 19 a – paragraph 2 – subparagraph 1 – point a – point ii
Article 19 a – paragraph 2 – subparagraph 1 – point a – point ii
(ii) the opportunities for the undertaking related to sustainability matters , in particular opportunities related to reductions in GHG emissions;
Amendment 164 #
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. The Commission should prioritise the adoption of standards specific to high-risk sectors and high-risk areas. The Commission should review the standards every 3 years to take account of relevant developments, including the development of international standards.
Amendment 166 #
Proposal for a directive
Recital 47 a (new)
Recital 47 a (new)
(47a) Undertakings in certain particularly emitting sectors such as extractive and fossil fuel industry, should take into account the relevant sectoral guidance from the IPCC and the International Energy Agency. Undertakings active in the extractive industry as defined in Article 41(1) of directive 2013/34/EU should thus be subject to additional sustainability disclosure requirements. These undertakings have high market capitalization, drive economic growth across the world and are an important source of government revenues in many countries. They also have exceptional sustainability impacts in terms of greenhouse gas emissions, pollution, biodiversity loss and human health. Extractive activities can also fuel corruption, conflict and threaten human rights when safeguards are not met or if projects are poorly managed. The fossil fuel industry is a major cause of climate change while the energy transition will transform the extractive industries, with a huge reduction in the production of fossil fuels and a massive increase in the exploitation of minerals needed for clean energy technology. European capital markets are exposed to climate-related risk - the vulnerability of coal, oil and gas companies is particularly pronounced. These climate related risks will also have real consequences for extractive industry stakeholders in producing countries.
Amendment 167 #
Proposal for a directive
Article 1 – paragraph 1 – point 3
Article 1 – paragraph 1 – point 3
Directive 2013/34/EU
Article 19 a – paragraph 2 – subparagraph 1 – point a – point iii
Article 19 a – paragraph 2 – subparagraph 1 – point a – point iii
(iii) the plans of the undertaking to ensure that its business model and strategy are compatible with the transition to a sustainable economy and with the limiting of global warming to 1.5 °C in line with the Paris Agreementclimate-neutral, sustainable, renewables- based, circular, energy- and resource- efficient economy where ecosystems and biodiversity are protected and restored, and with the objective of limiting of global warming to 1.5 °C in line with the Paris Agreement with no or limited overshoot taking into account the latest available science provided by the IPCC, including in particular an environmental and climate strategy comprising at least five- year absolute GHG emissions reduction targets up to 2050, covering the scopes 1, 2 and 3 as defined by the GHG protocol and excluding the recourse to carbon offsets, as well as five-year targets to reduce the environmental impact of the undertakings and of its business model, in particular on ecosystems and biodiversity;
Amendment 168 #
Proposal for a directive
Recital 47 b (new)
Recital 47 b (new)
(47b) Undertakings active in the extractive industry must be required to publish the contracts and other documents upon which these projects are based. Given the changes that will be wrought by the energy transition, availability of the terms governing resource extraction will be key to understanding how risk and reward will be shared between companies, communities and governments. According to the International Monetary Fund, contract transparency in the extractive industries has become a global norm, and the practice was made a requirement under the 2019 Extractive Industries Transparency Initiative standard—the main global standard for transparency in the extractive industries. There are already over 49 countries around the world that have disclosed contracts and at least 30 with laws requiring them to do so. Contract disclosure is supported by leading extractives industry companies and has been endorsed by private sector forums including the International Council on Mining and Metals. Leading development finance institutions including the World Bank’s IFC and MIGA already require private sector clients developing extractive resources to publish contracts. The EBRD has the same requirements for hydrocarbons development. The IMF, the UN, the International Bar Association and the OECD have endorsed the practice.
Amendment 171 #
Proposal for a directive
Recital 48
Recital 48
(48) Directive 2013/34/EU does not require that the financial statements or the management report are provided in a digital format, which hinders the findability and usability of the reported information. Users of sustainability information increasingly expect such information to be findable and machine- readable in digital formats and fully accessible, including for persons with disabilities. Digitalisation creates opportunities to exploit information more efficiently and holds the potential for significant cost savings for both users and undertakings. Undertakings should therefore be required to prepare their financial statements and their management report in XHTML format in accordance with Article 3 of Commission Delegated Regulation (EU) 2019/815,63 and to mark- up sustainability information, including the disclosures required by Article 8 of Regulation (EU) 2020/852, in accordance with that Delegated Regulation. A digital taxonomy to the Union sustainability reporting standards will be necessary to allow for the information reported to be tagged in accordance with those standards. These requirements should feed into the work on digitalisation announced by the Commission in its Communication A European strategy for data64 and in the Digital Finance Strategy for the EU.65 These requirements also complement the creation of a European single access point for public corporate information as envisaged in the capital markets union action plan, which also considers the need for structured data. _________________ 63 Commission Delegated Regulation (EU) 2018/815 of 17 December 2018 supplementing Directive 2004/109/EC of the European Parliament and of the Council with regard to regulatory technical standards on the specification of a single electronic reporting format (OJ L 143, 29.5.2019, p. 1). 64 https://ec.europa.eu/digital-single- market/en/european-strategy-data 65 https://ec.europa.eu/info/publications/2009 24-digital-finance-proposals_en
Amendment 177 #
Proposal for a directive
Article 1 – paragraph 1 – point 3
Article 1 – paragraph 1 – point 3
Directive 2013/34/EU
Article 19 a – paragraph 2 – subparagraph 1 – point a – point v
Article 19 a – paragraph 2 – subparagraph 1 – point a – point v
(v) how the undertaking’s strategy has been implemented with regard to sustainability matters and related targets, in connection with principle risks and opportunities have been integrated into the undertaking’s strategy ;
Amendment 177 #
Proposal for a directive
Recital 51
Recital 51
(51) Article 20 of Directive 2013/34/EU requires undertakings with securities listed on regulated markets to include a corporate governance statement in their management report, which has to contain among other information a description of the diversity policy applied by the undertaking in relation to its administrative, management and supervisory bodies. Article 20 of Directive 2013/34/EU leaves flexibility to undertakings to decide what aspects of diversity they report on. It does not explicitly oblige undertakings to include information on any particular aspect of diversity. In order to progress towards a more gender-balanced participation in economic decision-making, it is necessary to ensure that undertakings with securities listed on regulated markets always report on their gender diversity policies and the implementation thereof, in particular with respect to reaching at least equal representation in company boards and compliance with pay transparency requirements. However, to avoid unnecessary unreasonable and unjustified administrative burden, those undertakings should have the possibility to report some of the information required by Article 20 of Directive 2013/34/EU alongside other sustainability-related information.
Amendment 179 #
Proposal for a directive
Article 1 – paragraph 1 – point 3
Article 1 – paragraph 1 – point 3
Directive 2013/34/EU
Article 19 a – paragraph 2 – subparagraph 1 – point b
Article 19 a – paragraph 2 – subparagraph 1 – point b
(b) a description of the time-bound, short, medium and long-term targets related to sustainability matters set by the undertaking and of the progress the undertaking has made towards achieving those targets; with respect to the undertaking’s principle risks and opportunities, whether such targets are science-based alongside corresponding evidence, and of the progress the undertaking has made towards achieving those targets including: (i) a clearly defined path to reach the targets and corresponding timeframes; (ii)the methods, main data and rationale used in setting these targets which must uphold the principle of ‘do no significant harm’ within the meaning of Article 17 of Regulation(EU) 2020/852; (iii) targets to be reviewed by independent scientific reviewers, and made available to the general public including information on how and to what extent the undertaking is aligned with the broader strategy that qualify as 'environmentally sustainable' pursuant to Regulation (EU) 2020/852; (iv) the reasons explaining the impossibility or failure to reach intermediary and final targets;
Amendment 183 #
Proposal for a directive
Article 1 – paragraph 1 – point 3
Article 1 – paragraph 1 – point 3
Directive 2013/34/EU
Article 19 a – paragraph 2 – subparagraph 1 – point c
Article 19 a – paragraph 2 – subparagraph 1 – point c
(c) a description of the role of the administrative, management and supervisory bodies with regard to sustainability matters, including with regard to : (i) discussing the results of the due diligence process implemented with regard to sustainability matters to identify adverse environmental, climate or public health impacts, including any direct engagement with the stakeholders affected by the identified impacts; (ii) discussing the principal risks to the undertaking and opportunities for the undertaking related to sustainability matters; (iii) approving the undertaking’s strategy and targets related to sustainability matters and of financial resources for their implementation, and monitoring progress and challenges linked to the implementation of the strategy; (iv) providing specific oversight on the implementation of the undertaking’s strategy related to sustainability matters, including through setting up dedicated committees; (iv) expertise on sustainability matters possessed by the members of the administrative, management and supervisory bodies;
Amendment 186 #
Proposal for a directive
Article 1 – paragraph 1 – point 3
Article 1 – paragraph 1 – point 3
Directive 2013/34/EU
Article 19 a – paragraph 2 – subparagraph 1 – point d
Article 19 a – paragraph 2 – subparagraph 1 – point d
(d) a description of the undertaking’s policies in relation to sustainability matters including: (i) at minimum with respect to identified severe risks and opportunities; (ii) a description of the steps taken to adapt the undertaking’s other policies including prices negotiated between suppliers and subcontractors, financial returns from subsidiaries, taxation strategies and lobbying activities, incoherence with the undertaking’s strategy and policies with regard to sustainability matters;
Amendment 188 #
Proposal for a directive
Article 1 – paragraph 1 – point 3
Article 1 – paragraph 1 – point 3
Directive 2013/34/EU
Article 19 a – paragraph 2 – subparagraph 1 – point e – point i
Article 19 a – paragraph 2 – subparagraph 1 – point e – point i
(i) the due diligence process implemented with regard to sustainability matters; n line with applicable EU legislation on mandatory human rights and due diligence [Directive/Regulation XXX] that have been implemented with regard to sustainability matters to prevent, mitigate or remediate actual or potential adverse impacts on sustainability matters, including information on : - identification, assessment and prioritisation of actual and potential adverse environmental, ecological or climate-related impacts; - ceasing, prevention and mitigation of such impacts, - tracking implementation and their results, - identification and engagement of the adversely affected people, and alert mechanisms and how complaints and grievances are received; - the entities involved in the conception and in the implementation of the process at different stages, and the human, informational and financial resources available to them; - the degree to which the due diligence process complies with international standards and duty of care of the company concerning all matter related to sustainability;
Amendment 189 #
Proposal for a directive
Recital 63 a (new)
Recital 63 a (new)
(63a) Directive 2006/43/EC doesn’t require Member States to allow users to submit complaints against undertakings or statutory auditors or audit firms in case of a breach of the sustainability reporting and assurance requirements. Trade unions, consumer associations, civil society organisations in particular and members of the public in general should be able to file a complaint if they are aware of a violation of those requirements. The Member State shall examine the complaint, decide whether the statutory auditor or audit firm has breached its obligation and provide for adequate sanctions. This would give a recourse to users and actors potentially concerned by an undertaking’s incorrect sustainability reporting and allow for a better enforcement of the Directive.
Amendment 191 #
Proposal for a directive
Article 1 – paragraph 1 – point 3
Article 1 – paragraph 1 – point 3
Directive 2013/34/EU
Article 19 a – paragraph 2 – subparagraph 1 – point e – point ii
Article 19 a – paragraph 2 – subparagraph 1 – point e – point ii
(ii) the principal actual or potential adverse impacts connected with the undertaking’s value chainsupply and value chain as identified through the due diligence process, including its own operations, its products and services, its business relationships and its supply chain, including information on: - people affected by those impacts with a special attention given to the 20% poorest, - the effect of the undertaking’s business policies, practices and decisions on the identified issues, including of the undertaking’s purchasing policies and practices ;
Amendment 191 #
Proposal for a directive
Recital 70 a (new)
Recital 70 a (new)
Amendment 194 #
Proposal for a directive
Recital 71
Recital 71
(71) Member States are invited to assess the impact of their transposition act on SMEs in order to ensure that they are not disproportionately affected, giving specific attention to micro-enterprises and to the unreasonable and unjustified administrative burden, and to publish the results of such assessments. Member States should consider introducing introduce measures to support SMEs in applying the voluntary simplified reporting standards.
Amendment 196 #
Proposal for a directive
Article 1 – paragraph 1 – point 3
Article 1 – paragraph 1 – point 3
Directive 2013/34/EU
Article 19 a – paragraph 2 – subparagraph 1 – point e – point iii
Article 19 a – paragraph 2 – subparagraph 1 – point e – point iii
(iii) any actions taken, in the application of the due diligence process, and the result of such actions, to prevent, mitigate or remediate actual or potential adverse impacts and the effectiveness of their results;
Amendment 197 #
Proposal for a directive
Article 1 – paragraph 1 – point 1 – introductory part
Article 1 – paragraph 1 – point 1 – introductory part
(1) in Article 1, the following paragraph 3 isand 3a are added:
Amendment 198 #
Proposal for a directive
Article 1 – paragraph 1 – point 3
Article 1 – paragraph 1 – point 3
Directive 2013/34/EU
Article 19 a – paragraph 2 – subparagraph 1 – point f
Article 19 a – paragraph 2 – subparagraph 1 – point f
(f) a description of the processes established in order to identify stakeholders and to engage with them in setting, enforcing and evaluating the undertaking’s strategy, policies and principal risks to the undertaking related to sustainability matters, including the undertaking’s principal dependencies on such matters, and how the undertaking manages those risks;
Amendment 201 #
Proposal for a directive
Article 1 – paragraph 1 – point 1
Article 1 – paragraph 1 – point 1
Directive 2013/34/EU
Article 1 – paragraph 3
Article 1 – paragraph 3
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 regardless of their legal form:
Amendment 203 #
Proposal for a directive
Article 1 – paragraph 1 – point 3
Article 1 – paragraph 1 – point 3
Directive 2013/34/EU
Article 19 a – paragraph 2 – subparagraph 1 – point g
Article 19 a – paragraph 2 – subparagraph 1 – point g
(g) indicators relevant to the disclosures referred to in points (a) to (f).
Amendment 205 #
Proposal for a directive
Article 1 – paragraph 1 – point 1
Article 1 – paragraph 1 – point 1
Directive 2013/34/EU
Article 1 – paragraph 3(a) (new)
Article 1 – paragraph 3(a) (new)
3a. A list of high-risk sectors is included in Annex IIa which every three years shall be reviewed and modified by the Commission, as appropriate, through a delegated act. This review shall take into account existing EU sector-specific legislation and sector-specific disclosures in recognised international reporting frameworks.
Amendment 206 #
Proposal for a directive
Article 1 – paragraph 1 – point 2 – introductory part
Article 1 – paragraph 1 – point 2 – introductory part
Directive 2013/34/EU
Article 2
Article 2
(2) in Article 2, the following points (17) to (20e) are added:
Amendment 208 #
Proposal for a directive
Article 1 – paragraph 1 – point 3
Article 1 – paragraph 1 – point 3
Directive 2013/34/EU
Article 19 a – paragraph 2 – subparagraph 3
Article 19 a – paragraph 2 – subparagraph 3
Undertakings shall report the process carried out to identify the information that they have included in the management report in accordance with paragraph 1, including how it is informed by the due diligence process and in this process they shall take account of short, medium and long-term horizons.
Amendment 209 #
Proposal for a directive
Article 1 – paragraph 1 – point 2
Article 1 – paragraph 1 – point 2
Directive 2013/34/EU
Article 2 – point 18
Article 2 – point 18
(18) ‘sustainability reporting’ means reporting information related to sustainability matters in accordance with Articles 19a, 19d and 29a of this Directive;, where the environmental matters shall be based on, and take account of underlying indicators and methodologies set out in Regulation (EU) 2020/852 and the delegated acts adopted pursuant to it.
Amendment 211 #
Proposal for a directive
Article 1 – paragraph 1 – point 3
Article 1 – paragraph 1 – point 3
Directive 2013/34/EU
Article 19 a – paragraph 3 – subparagraph 2
Article 19 a – paragraph 3 – subparagraph 2
Where appropriatenecessary for the understanding of the undertaking’s risks, the information referred to in paragraphs 1 and 2 shall contain information about the undertaking’s value chain, including the undertaking’s own operations, products and services, its business relationships and its supply chain involved with such risks, in particular in high-risk sectors referred to in Annex IIa.
Amendment 212 #
Proposal for a directive
Article 1 – paragraph 1 – point 2
Article 1 – paragraph 1 – point 2
Directive 2013/34/EU
Article 2 – point 20 a (new)
Article 2 – point 20 a (new)
(20a) 'high-risk sector' means a sector that is association, as a result of its size, business and value or supply chain characteristics, with a high likelihood of actual or potential severe impacts on sustainability matters and is listed in Annex IIa;
Amendment 214 #
Proposal for a directive
Article 1 – paragraph 1 – point 3
Article 1 – paragraph 1 – point 3
Directive 2013/34/EU
Article 19 a – paragraph 3 – subparagraph 4
Article 19 a – paragraph 3 – subparagraph 4
Amendment 215 #
Proposal for a directive
Article 1 – paragraph 1 – point 2
Article 1 – paragraph 1 – point 2
Directive 2013/34/EU
Article 2
Article 2
(20b) ‘high-risk areas means a geographical area that is particularly exposed to sustainability risks or is associated with a high likelihood of actual or potential severe impacts on sustainability matters;
Amendment 216 #
Proposal for a directive
Article 1 – paragraph 1 – point 2
Article 1 – paragraph 1 – point 2
Directive 2013/34/EU
Article 2 – point 20 b (new)
Article 2 – point 20 b (new)
(20b) 'high-risk undertaking' means an undertaking active in one or more of the high-impact sectors listed in Annex IIa;
Amendment 217 #
Proposal for a directive
Article 1 – paragraph 1 – point 2
Article 1 – paragraph 1 – point 2
Directive 2013/34/EU
Article 2 – point 20 c (new)
Article 2 – point 20 c (new)
(20c) 'climate neutrality' and 'net-zero' mean a balance between anthropogenic greenhouse gas emissions by sources and removals by sinks to be reached by 2050, in accordance with the Article 2 of the Regulation (EU) 2021/1119, (“European Climate Law”) ;
Amendment 219 #
Proposal for a directive
Article 1 – paragraph 1 – point 2
Article 1 – paragraph 1 – point 2
Directive 2013/34/EU
Article 2 – point 20 d (new)
Article 2 – point 20 d (new)
(20d) ‘Science-based target’ is a target defined on the basis of conclusive scientific environmental evidence and within dependent scientific validation, that when achieved by the undertaking ensures that the undertaking’s impacts, as specified in Article 19a, will be aligned with the sustainability goals and criteria of the European Union for the specific environmental issue. In the specific case of climate change mitigation, this means a target enabling alignment of the undertaking’s impacts on climate change with a 1.5°C climate scenario with no or limited overshoot as defined by the IPCC;
Amendment 220 #
Proposal for a directive
Article 1 – paragraph 1 – point 2
Article 1 – paragraph 1 – point 2
Directive 2013/34/EU
Article 2 – point 20 e (new)
Article 2 – point 20 e (new)
(20e) 'Severe impacts' are adverse impacts on people and the environment connected to the undertaking's value chain by its own operations, its products and services, its business relationships, its subsidiaries, and its supply chain, based on the gravity of the impact on the sustainability matter, the number of individuals that are or could be affected, or the scale of the damage to the environment; the ease with which the harm could be remediated, restoring the environment or affected people to their prior state; and which cause the greatest harm relative to other impacts the undertaking has identified.
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 7
Article 19a – paragraph 7
Amendment 223 #
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
Amendment 223 #
Proposal for a directive
Article 1 – paragraph 1 – point 3
Article 1 – paragraph 1 – point 3
Directive 2013/34/EU
Article 19(a) – point 1
Article 19(a) – point 1
1. LargeAll undertakings and, as of 1 January 2026,, including small and medium-sized undertakings which are undertakings referred to in Article 2, point (1), point (a), small and medium-sized high-impact undertakings, undertakings registered in a non-EU/EEA country with significant business in the EU, and undertakings organised as foundations or trusts or franchises meeting the size criteria for large undertakings in Directive 2013/34/EU 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 225 #
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
Amendment 226 #
Proposal for a directive
Article 1 – paragraph 1 – point 3 Directive 2013/34/EU
Article 1 – paragraph 1 – point 3 Directive 2013/34/EU
1. Large undertakings and, as of 1 January 2026, public interest entities, small and medium-sized undertakings which are undertakings referred to in Article 2, point (1), point (a),operating in high-risk sectors or high-risk areas listed in annex, and undertakings meeting those criteria that operate in the single market without being established in the European Union 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 228 #
Proposal for a directive
Article 1 – paragraph 1 – point 3
Article 1 – paragraph 1 – point 3
Directive 2013/34/EU
Article 19 a – paragraph 7 – subparagraph 4
Article 19 a – paragraph 7 – subparagraph 4
Amendment 229 #
1a. In accordance with the EU labour law acquis and national law and practice, the central management shall consult with the workers, trade unions and workers' representatives at the beginning of the reporting period on the design of the reporting system, including the indicators included and the means of obtaining and verifying sustainability information. Central management shall also consult workers, trade unions and workers' representatives in the identification of risks and impacts of the undertaking on the environment and people. Workers, trade unions and workers' representatives shall be provided with the necessary resources, including the support of an expert, to ensure the effective exercise of the rights arising from this Directive. Member States shall ensure that workers' rights to information and consultation are respected in relation to sustainability reporting and are exercised in accordance with the legal framework provided for in Directive 2002/14/EC and, where applicable for community-scale undertakings or community-scale groups of undertakings, in accordance with Directive 2009/38/EC, European Companies in accordance with Directive 2001/86EC and European Cooperative Societies in accordance with Directive 2003/72/EC. Member States may decide that workers' rights to information and consultation apply with respect to the workers of companies other than those referred to in Article 3 (1) of Directive 2002/14/EC. Where the administrative or management body of the undertaking receives an opinion on the sustainability report from the representatives of the workers or, where there are no such representatives, from the workers themselves, as provided for under national law, that opinion shall be appended to the sustainability report
Amendment 235 #
Proposal for a directive
Article 1 – paragraph 1 – point 3
Article 1 – paragraph 1 – point 3
Directive 2013/34/EU
Article 19(a) – point 2
Article 19(a) – point 2
(a) a brief description of the undertaking's short-, medium- and long- term business model and strategy, including:
Amendment 239 #
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 – point ii
Article 19b – paragraph 1 – subparagraph 1 – point b – point ii
(ii) information that undertakings shall report that is specific to the sector in which they operate, prioritising high-risk sectors referred to in Annex IIa.
Amendment 244 #
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 1
Article 19b – paragraph 2 – subparagraph 1
The sustainability reporting standards referred to in paragraph 1 shall require that the information to be reported is understandable, relevant, representative, verifiable, comparable, and is represented in a faithful manner. The sustainability reporting standards shall also be assessed against criteria that will ensure quality and relevance of disclosed information : (i) They must not lead to unintended consequences with regards to company practices ; (ii) They must truly reflect the likelihood that the company is reducing negative outcomes and maximising positive outcomes for people and the planet (indicative capability) ; (iii) When relevant and possible, they shall be measurable ; (iv) They must be reliable and provide insight in the absence of contextual information for its interpretation ; (v) The environmental standards must be science-based, where relevant methodologies are available.
Amendment 244 #
Proposal for a directive
Article 1 – paragraph 1 – point 3
Article 1 – paragraph 1 – point 3
Directive 2013/34/EU
Article 19(a) – point 2
Article 19(a) – point 2
(iv) how the undertaking’s business model and strategy take account of the rights and interests of the undertaking’s stakeholders, including its workers and the broader community, and of the impacts of the undertaking on sustainability matters and related targets, in connection with principle risks and opportunities have been integrated into the undertaking’s strategy;
Amendment 248 #
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 a – introductory part
Article 19b – paragraph 2 – subparagraph 2 – point a – introductory part
(a) specify the information that undertakings are to disclose about environmental and climate factors, including information about:
Amendment 248 #
Proposal for a directive
Article 1 – paragraph 1 – point 3
Article 1 – paragraph 1 – point 3
Directive 2013/34/EU
Article 19(a) – point 2
Article 19(a) – point 2
(b) a description of the time-bound, short, medium and long-term targets related to sustainability matters set by the undertaking and of the progress the undertaking has made towards achieving thosewith respect to the undertaking’s principle risks and opportunities, whether such targets are science-based alongside corresponding evidence, and of the progress the undertaking has made towards achieving those targets including: (i) a clearly defined path to reach the targets and corresponding timeframes; (ii) the methods, main data and rationale used in setting these targets which must uphold the principle of ‘do no significant harm’ within the meaning of Article 17 of Regulation(EU) 2020/852; (iii) targets to be reviewed by independent scientific reviewers, and made available to the general public including information on how and to what extent the undertaking is aligned with the broader strategy that qualify as 'environmentally sustainable' pursuant to Regulation (EU) 2020/852; (iv) the reasons explaining the impossibility or failure to reach intermediary and final targets;
Amendment 249 #
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 a – subpoint –i (new)
Article 19b – paragraph 2 – subparagraph 2 – point a – subpoint –i (new)
Amendment 250 #
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 a – subpoint i
Article 19b – paragraph 2 – subparagraph 2 – point a – subpoint i
(i) climate change mitigation , including - GHG emissions on all scopes 1, 2 and 3 as defined by the GHG Protocol ; - the transition, financial and investment plans and absolute GHG emissions reduction targets of the undertaking for the short time horizon of 3-5years, medium time horizon of 10-15 years, and long-term time horizon, including a target to be achieved by 2030 and targeted date to achieve climate neutrality; - a substantiated explanation on the alignment of the undertaking’s business model and strategy with the goal of limiting of global warming to 1.5 °C with no or limited overshoot, pursuant to the latest evidence provided by the IPCC in this regard the sustainability reporting standards should specify which climate change scenarios the undertakings should apply in line with the latest climate science;
Amendment 253 #
Proposal for a directive
Article 1 – paragraph 1 – point 3
Article 1 – paragraph 1 – point 3
Directive 2013/34/EU
Article 19(a) – point 2
Article 19(a) – point 2
(c) a description of the role of the administrative, management and supervisory bodies with regard to sustainability matters;, including with regard to: (i) discussions on the results of the due diligence process implemented with regard to sustainability matters and on adverse effects, as well as involvement and exchanges with the different stakeholders affected by the identified impacts; (ii) discussions on the principal risks to the undertaking and opportunities for the undertaking with regard to sustainability matters; (iii) agreements on the undertaking’s strategy with regard to sustainability matters and financial resources for the implementation and monitoring progress; (iv) the process set up to oversee the implementation of the undertaking’s strategy related to sustainability matters; (v) expertise on sustainability matters of the members of the administrative, management and supervisory bodies; (vi) the matters addressed by these bodies during the reporting period
Amendment 254 #
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 a – point iii
Article 19b – paragraph 2 – subparagraph 2 – point a – point iii
(iii) water and marineThe sustainable use and protection of water, marine, and soil resources;
Amendment 256 #
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 a – point iv
Article 19b – paragraph 2 – subparagraph 2 – point a – point iv
(iv) resource use and circular economyThe transition to circular economy, including natural resource use and the life cycle of the products;
Amendment 257 #
Proposal for a directive
Article 1 – paragraph 1 – point 3
Article 1 – paragraph 1 – point 3
Directive 2013/34/EU
Article 19(a) – point 2
Article 19(a) – point 2
(d) a description of the undertaking’s policies in relation to sustainability matters, including with regard to: (i) identified severe risks and opportunities; (ii) the steps taken to overcome incoherences and mainstream sustainability matters throughout all other relevant policies, including prices negotiated between suppliers and subcontractors, financial returns from subsidiaries, taxation strategies and lobbying activities, overcome incoherence with the undertaking’s strategy and policies;
Amendment 261 #
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 a – point v
Article 19b – paragraph 2 – subparagraph 2 – point a – point v
(v) pollutiondirect, indirect and diffuse pollution, prevention and control;
Amendment 261 #
Proposal for a directive
Article 1 – paragraph 1 – point 3
Article 1 – paragraph 1 – point 3
Directive 2013/34/EU
Article 19(a) – point 2
Article 19(a) – point 2
(i) the due diligence process implemented with regard to sustainability matters; , including with regard to: - identification, assessment and prioritisation of actual and potential adverse impacts;- policies and measures for the prevention, cessation, mitigation or remediation of actual or potential adverse impacts; - tracking of the implementation of the process and its results; - identification and involvement of all adversely affected people; - alert mechanisms as well as complaints and grievances, including how they are received and used by different stakeholders and affected people; - the different actors involved in the development, implementation, monitoring and evaluation of the process at different stages, and the human, informational and financial resources available to them; - how the due diligence process complies with international standards and duty of care of the company concerning all matter related to sustainability;
Amendment 264 #
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 a – point vi
Article 19b – paragraph 2 – subparagraph 2 – point a – point vi
(vi) biodiversity and ecosystemsanimal welfare, the protection and restoration of biodiversity and ecosystems including commodity driven deforestation, ecosystem degradation and land use;
Amendment 266 #
Proposal for a directive
Article 1 – paragraph 1 – point 3
Article 1 – paragraph 1 – point 3
Directive 2013/34/EU
Article 19(a) – point 2
Article 19(a) – point 2
(ii) the principal actual or potential adverse impacts connected with the undertaking’s supply and value chain, in particular as identified through the due diligence process, including its own operations, its products and services, its business relationships and its supply chain, including with regard to: - all people affected by those impacts with particular attention to persons who frequently face discrimination or are in a vulnerable situation, such as women, children, minorities, LGBTIQ persons, persons with disabilities or persons experiencing poverty, especially the 20% poorests, or social exclusion ; - the effect of the undertaking’s business policies, practices and decisions on the identified issues, including of the undertaking’s purchasing policies and practices ;
Amendment 271 #
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 – point ii
Article 19b – paragraph 2 – subparagraph 2 – point b – point ii
(ii) working conditions, including secure and adaptable employment, wages, social dialogue, collective bargaining and the involvement of workers, work-life balance, and a healthy, safe and well- adapted work environment and just transition measures adopted through social dialogue;
Amendment 272 #
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 – point iii
Article 19b – paragraph 2 – subparagraph 2 – point b – point iii
(iii) respect for the human and environmental rights, fundamental freedoms, democratic principles and standards established in the International Bill of Human Rights and other core UN human rights conventions, 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, the European Convention on Human Rights and its additional protocols, the UNECE Convention on Access to Information, Public Participation in Decision Making and Access to Justice in Environmental Matters (Aarhus Convention) and Resolution 48/13 adopted by the Human Rights Council on the 8 October 2021 on the human right to a clean, healthy environment.
Amendment 272 #
Proposal for a directive
Article 1 – paragraph 1 – point 3
Article 1 – paragraph 1 – point 3
Directive 2013/34/EU
Article 19(a) – point 2
Article 19(a) – point 2
(iii) any actions taken, including in the application of the due diligence process, and the result of such actions, to prevent, mitigate or remediate actual or potential adverse impacts and the effectiveness of their results;
Amendment 274 #
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 – point iii a (new)
Article 19b – paragraph 2 – subparagraph 2 – point b – point iii a (new)
(iiia) The undertaking's value chain linked to severe actual and potential impacts, including sector-specific information on suppliers, types of products and services supplied, and on sourcing and traceability of commodities and materials associated with high likelihood of actual and potential adverse impacts on sustainability matters.
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 2 – subparagraph 2 – point c a (new)
Article 19b – paragraph 2 – subparagraph 2 – point c a (new)
(ca) specify the information that undertakings are to disclose about their plans towards limiting global warming to 1.5 °C in line with the Paris Agreement and the progress the undertaking has made towards achieving this target.
Amendment 277 #
Proposal for a directive
Article 1 – paragraph 1 – point 3
Article 1 – paragraph 1 – point 3
Directive 2013/34/EU
Article 19(a) – point 2
Article 19(a) – point 2
(f a) a description of processes established in order to identify stakeholders and to involve them in the development, implementation, monitoring and evaluation of the undertaking’s strategy and policies;
Amendment 280 #
Proposal for a directive
Article 1 – paragraph 1 – point 4
Article 1 – paragraph 1 – point 4
Directive 2013/34/EU
Article 19b – paragraph 3 – point a
Article 19b – paragraph 3 – point a
(a) the work of global standard-setting initiatives for sustainability reporting, and existing standards and frameworks for natural capital accounting, responsible business conduct, corporate social responsibility, and sustainable development, including the GHG protocol, the Paris Agreement and the 2018 IPCC P1 Special Report on 1.5degrees;
Amendment 281 #
Proposal for a directive
Article 1 – paragraph 1 – point 4
Article 1 – paragraph 1 – point 4
Directive 2013/34/EU
Article 19b – paragraph 3 – point c
Article 19b – paragraph 3 – point c
(c) the criteria set out in the delegated acts adopted pursuant to Regulation (EU) 2020/852*7including the distinction between environmentally sustainable, transitional and enabling economic activities ; __________________ *7 Regulation (EU) 2020/852 of the European Parliament and of the Council of 18 June 2020 on the establishment of a framework to facilitate sustainable investment, and amending Regulation (EU) 2019/2088 (OJ L 198, 22.6.2020, p. 13).
Amendment 283 #
Proposal for a directive
Article 1 – paragraph 1 – point 4
Article 1 – paragraph 1 – point 4
Directive 2013/34/EU
Article 19b – paragraph 3 a (new)
Article 19b – paragraph 3 a (new)
Amendment 289 #
Proposal for a directive
Article 1 – paragraph 1 – point 4
Article 1 – paragraph 1 – point 4
Directive 2013/34/EU
Article 19c – paragraph 1
Article 19c – paragraph 1
The Commission shall adopt delegated acts in accordance with Article 49 to provide for sustainability reporting standards proportionate to the capacities and characteristics of small and medium-sized undertakings. Those sustainability reporting standards shall specify whichhow small and medium-sized undertakings shall report on information referred to in Articles 19a and 29a small and medium-sized undertakings referred to in Article 2, point (1)(a) shall report. They shall take into account the criteria set out in Article 19b, paragraphs 2 and 3. They shall also, where relevant, specify the structure in which that information shall be reported.
Amendment 289 #
Proposal for a directive
Article 1 – paragraph 1 – point 3
Article 1 – paragraph 1 – point 3
Directive 2013/34/EU
Article 19(a) – point 3
Article 19(a) – point 3
Amendment 291 #
Proposal for a directive
Article 1 – paragraph 1 – point 3
Article 1 – paragraph 1 – point 3
Directive 2013/34/EU
Article 19(a) – point 3
Article 19(a) – point 3
Amendment 294 #
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 a – introductory part
Article 29a – paragraph 2 – subparagraph 1 – point a – introductory part
(a) a brief description of the group's business model and strategy, including:
Amendment 295 #
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 a – point i
Article 29a – paragraph 2 – subparagraph 1 – point a – point i
(i) the resilience of the group's business model and strategy to risks related to sustainability matters; in particular short, medium, and long-term risks associated with climate change in particular risks associated with : - The physical impacts of climate change; - The economic disruptions and security threats that result from the physical impacts of climate change; - The transition impacts and financial impacts that result as the global market moves towards a climate-neutral economy by at least 2050, including reputational impacts deriving from changing consumer behaviour; - The regulatory impacts caused by supranational, national and local governments efforts to limit global warming to 1.5 °C above pre-industrial levels with no or limited overshoot pursuant to the latest scientific evidence as provided by the IPCC;
Amendment 296 #
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 a – point ii
Article 29a – paragraph 2 – subparagraph 1 – point a – point ii
(ii) the opportunities for the group related to sustainability matters, in particular opportunities related to reductions in GHG emissions ;
Amendment 297 #
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 a – point iii
Article 29a – paragraph 2 – subparagraph 1 – point a – point iii
(iii) the plans of the group to ensure that the group’s business model and strategy are compatible with the transition to a sustainable economy and with the limiting of global warming to 1.5 °C in line with the Paris Agreementclimate-neutral, sustainable, renewables- based, circular, energy- and resource- efficient economy where ecosystems and biodiversity are protected and restored, and with the objective of limiting of global warming to 1.5 °C in line with the Paris Agreement with no or limited overshoot taking into account the latest available science provided by the IPCC, including in particular an environmental and climate strategy comprising at least five- year absolute GHG emissions reduction targets up to 2050, covering the scopes 1, 2 and 3 as defined by the GHG protocol and excluding the recourse to carbon offsets, as well as five-year targets to reduce the environmental impact of the group and of its business model, in particular on ecosystems and biodiversity;
Amendment 298 #
Proposal for a directive
Article 1 – paragraph 1 – point 3
Article 1 – paragraph 1 – point 3
Directive 2013/34/EU
Article 19(a) – point 5
Article 19(a) – point 5
Amendment 301 #
Proposal for a directive
Article 1 – paragraph 1 – point 3
Article 1 – paragraph 1 – point 3
Directive 2013/34/EU
Article 19(a) – point 7
Article 19(a) – point 7
Amendment 305 #
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 a – point v
Article 29a – paragraph 2 – subparagraph 1 – point a – point v
(v) how the group’s strategy has been implemented with regard to sustainability matters and related targets, in connection with principle risks and opportunities have been integrated into the undertaking’s strategy ;
Amendment 306 #
Proposal for a directive
Article 1 – paragraph 1 – point 7
Article 1 – paragraph 1 – point 7
(b) a description of the time-bound, short, medium and long-term, targets related to sustainability matters set by the group with respect to the group's principle risks and opportunities, whether such targets are science-based alongside corresponding evidence, and of the progress of the undertaking has made towards achieving themose targets including (i) a clearly defined path to reach the targets and corresponding timeframes; (ii) the methods, main data and rationale used in setting these targets; (iii) the reasons explaining the impossibility any failure to reach intermediary and final targets;
Amendment 309 #
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 c
Article 29a – paragraph 2 – subparagraph 1 – point c
(c) a description of the role of the administrative, management and supervisory bodies with regard to sustainability matters; including (i) the extent to which these bodies shall take into consideration sustainability matters and, where appropriate, the resources at their disposal in order to do so ; (ii) and the consistency of the remuneration schemes of their members with the company's sustainability strategy. (iii) discussing the results of the due diligence process implemented with regard to sustainability matters to identify adverse impacts, including any direct engagement with the stakeholders affected by the identified impacts; (iv) Discussing the principal risks and opportunities for the undertaking related to sustainability matters; (v) Providing specific oversight on the implementation of the undertaking’s strategy related to sustainability matters, including through setting up dedicated committees; (vi) Expertise on sustainability matters possessed by the members of the administrative, management and supervisory bodies;
Amendment 310 #
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 d
Article 29a – paragraph 2 – subparagraph 1 – point d
(d) a description of the group’s policies in relation to sustainability matters with respect to identified risks and opportunities;;
Amendment 311 #
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 mattersn line with applicable EU legislation on a mandatory human rights and due diligence [Directive/Regulation XXX] that have been implemented with regard to sustainability matters to prevent, mitigate or remediate actual or potential adverse impacts on sustainability matters, including information on : - identification, assessment and prioritisation of actual and potential adverse impacts; - ceasing, prevention and mitigation of such impacts; - tracking implementation and their results ; - identification and engagement of the adversely affected people, and alert mechanisms and how complaints and grievances are received; - the entities involved in the conception and in the implementation of the process at different stages, and the human, informational and financial resources available to them; - the degree to which the due diligence process complies with international standards and duty of care of the company concerning all matter related to sustainability;
Amendment 312 #
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 ii
Article 29a – paragraph 2 – subparagraph 1 – point e – point ii
(ii) the principal actual or potential adverse impacts connected with the group’s value chain's supply and value chain as identified through the due diligence process, including its own operations, its products and services, its business relationships and its supply chain, including information on: - people affected by those impacts with a special attention given to the 20% poorest ; - the effect of the undertaking’s business policies, practices and decisions on the identified issues, including of the undertaking’s purchasing policies and practices ;
Amendment 314 #
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 iii
Article 29a – paragraph 2 – subparagraph 1 – point e – point iii
(iii) any actions taken, in the application of the due diligence process, and the result of such actions, to prevent, mitigate or remediate actual or potential adverse impacts and the effectiveness of their results;
Amendment 320 #
Proposal for a directive
Article 1 – paragraph 1 – point 3
Article 1 – paragraph 1 – point 3
Directive 2013/34/EU
Article 19a
Article 19a
7 a. The European Commission shall be empowered to adopt delegated acts in accordance with Article 49 to amend the lists of high-risk sectors and high-risk areas set out in Article 2, point (20a) and point (20b). The list shall take into account the NACE classification, existing legislation and guidelines of the European Union, international reporting standards, reports of international organisations, and relevant and reliable evidence.
Amendment 323 #
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 327 #
Proposal for a directive
Article 1 – paragraph 1 – point 7
Article 1 – paragraph 1 – point 7
Directive 2013/34/EU
Article 29a – paragraph 5
Article 29a – paragraph 5
Amendment 328 #
Proposal for a directive
Article 1 – paragraph 1 – point 7
Article 1 – paragraph 1 – point 7
Directive 2013/34/EU
Article 29a – paragraph 7
Article 29a – paragraph 7
Amendment 330 #
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 – subparagraph 2 – point aa
Article 34 – paragraph 1 – subparagraph 2 – point aa
(aa) where applicable, express an opinion based on a limited assurance engagementor, where applicable, reasonable assurance engagement as well as external verifications on reported data for GHG emissions 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 332 #
Proposal for a directive
Article 1 – paragraph 1 – point 4
Article 1 – paragraph 1 – point 4
Directive 2013/34/EU
Article 19b
Article 19b
(ii) information that undertakings shall report that is specific to the sector or the area in which they operate, and as a matter of priority, information that undertaking operating in high-risk sectors and high-risk areas shall report.
Amendment 334 #
Proposal for a directive
Article 1 – paragraph 1 – point 11 – point b
Article 1 – paragraph 1 – point 11 – point b
Directive 2013/34/EU
Article 49 – paragraph 3a – subparagraph 1
Article 49 – paragraph 3a – subparagraph 1
When adopting delegated acts pursuant to Articles 19b and 19c, the Commission shall take into consideration technical advice from EFRAG, provided suchthe independent and public technical advisory body, provided - this independent public authority is fully financed by public funds from the EU and the Member States ; - such advice has been developed in accordance with the priorities and criteria outlined in Article 19b by an independent and public technical advisory body with balanced representation of preparers, investors, and civil society organisations and social partners and the composition of such body is approved by the Commission ; - the participation in the technical advisory body is not conditioned by financial contribution ; - the technical advice has been developed with proper due process, public oversight and transparency and with- the expertise of relevant stakeholders, andprovided by members of the independent and public technical advisory body covers all sustainability matters outlined in Articles 19a and19b ; - the technical advice is accompanied by cost-benefit analyses that include analyses of the impacts of the technical advice on sustainability matters.
Amendment 334 #
Proposal for a directive
Article 1 – paragraph 1 – point 4
Article 1 – paragraph 1 – point 4
Directive 2013/34/EU
Article 19(b) – point 1
Article 19(b) – point 1
(ii) information that undertakings shall report that is specific to the sector in which they operate, prioritising the high-risk sectors referred to in Annex IIa.
Amendment 337 #
Proposal for a directive
Article 1 – paragraph 1 – point 4
Article 1 – paragraph 1 – point 4
Directive 2013/34/EU
Article 19(b) – point 1
Article 19(b) – point 1
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), the European Foundation for Living and Working Conditions, the European Agency for Safety and Health at Work, the European Institute for Gender Equality, the Aarhus Convention Compliance Committee and relevant stakeholders, including trade unions and civil society organisations, and where necessary shall amend such delegated act to take into account relevant developments, including developments with regard to international standards.
Amendment 340 #
Proposal for a directive
Article 1 – paragraph 1 – point 12 a (new)
Article 1 – paragraph 1 – point 12 a (new)
Directive 2013/34/EU
Annex II a (new)
Annex II a (new)
the following Annex IIa is inserted: ANNEX IIa : LIST OF SECTORS REFERRED TO IN POINT (21) OF ARTICLE 2 A- Agriculture B- Fishing C- Forestry D- Food E- Construction F- Mining and Quarrying G- Manufacturing H- Logistics, Transportation and Storing I- Electricity, Gas, Steam, and Air Conditioning Supply J- Water supply, Sewerage and Waste Management K- Employment Activities L- Garment and Retail M- Health Care, Social Care and Elder Care N- Cleaning and Household Services 0-Hospitality P- Financial and Insurance Activities Q-Technology, Digital Activities and Online Platforms
Amendment 343 #
Proposal for a directive
Article 1 – paragraph 1 – point 4
Article 1 – paragraph 1 – point 4
Directive 2013/34/EU
Article 19(b) – point 2
Article 19(b) – point 2
2. The sustainability reporting standards referred to in paragraph 1 shall require that the information to be reported is understandable, relevant, representative, verifiable, comparable, and is represented in a faithful manner. The standards shall also be assessed against criteria that will ensure quality and relevance of disclosed information. In particular, they shall be aimed at reducing negative outcomes and maximising positive outcomes for people and the planet, be measurable where possible and relevant, reliable and science-based where relevant methodologies are available.
Amendment 349 #
Proposal for a directive
Article 1 – paragraph 1 – point 4
Article 1 – paragraph 1 – point 4
Directive 2013/34/EU
Article 19(b) – point 2
Article 19(b) – point 2
(a) specify the information that undertakings are to disclose about environmental and climate factors, including information about:
Amendment 350 #
Proposal for a directive
Article 1 – paragraph 1 – point 4
Article 1 – paragraph 1 – point 4
Directive 2013/34/EU
Article 19(b) – point 2
Article 19(b) – point 2
(-i) The nine planetary boundaries as defined by the Stockholm Resilience Centre, including : climate change, biosphere integrity(functional and genetic), land- system changes, freshwater use, Biogeochemical flows (nitrogen and phosphorus), ocean acidification, atmospheric aerosol pollution, stratospheric ozone depletion, and release of chemicals;
Amendment 353 #
Proposal for a directive
Article 1 – paragraph 1 – point 4
Article 1 – paragraph 1 – point 4
Directive 2013/34/EU
Article 19(b) – point 2
Article 19(b) – point 2
(i) climate change mitigation; prevention and mitigation, including: - GHG emissions on all scopes 1, 2 and 3 as defined by the Greenhouse Gas Protocol ; - the transition, financial and investment plans and absolute GHG emissions reduction targets of the undertaking for the short time horizon of 3-5years, medium time horizon of 10-15 years, and long-term time horizon, including a target to be achieved by 2030 and targeted date to achieve climate neutrality; - a substantiated explanation on the alignment of the undertaking’s business model and strategy with the goal of limiting of global warming to 1.5 °C with no or limited overshoot, pursuant to the latest evidence provided by the IPCC in this regard the sustainability reporting standards should specify which climate change scenarios the undertakings should apply in line with the latest climate science ;
Amendment 365 #
Proposal for a directive
Article 1 – paragraph 1 – point 4
Article 1 – paragraph 1 – point 4
Directive 2013/34/EU
Article 19(b) – point 2
Article 19(b) – point 2
(iii) waterthe sustainable use and protection of water, soil and marine resources;
Amendment 370 #
Proposal for a directive
Article 1 – paragraph 1 – point 4
Article 1 – paragraph 1 – point 4
Directive 2013/34/EU
Article 19(b) – point 2
Article 19(b) – point 2
(iv) resource use and circular economyThe transition to circular economy, including natural resource use and the lifecycle of the products;
Amendment 375 #
Proposal for a directive
Article 1 – paragraph 1 – point 4
Article 1 – paragraph 1 – point 4
Directive 2013/34/EU
Article 19(b) – point 2
Article 19(b) – point 2
(v) pollutiondirect, indirect and diffuse pollution, prevention and control;
Amendment 380 #
Proposal for a directive
Article 1 – paragraph 1 – point 4
Article 1 – paragraph 1 – point 4
Directive 2013/34/EU
Article 19(b) – point 2
Article 19(b) – point 2
(vi) biodiversity and ecosystemsAnimal welfare, the protection and restoration of biodiversity and ecosystems, including commodity driven deforestation, ecosystem degradation and land use;
Amendment 384 #
Proposal for a directive
Article 1 – paragraph 1 – point 4
Article 1 – paragraph 1 – point 4
Directive 2013/34/EU
Article 19(b) – point 2
Article 19(b) – point 2
(i) equal treatment and opportunities for all, including gender equality and equal pay for equal workwork of equal value, , diversity in terms of age and ethnicity of workers, pay transparency, measures against violence and harassment, training and skills development, and employment and inclusion of people with disabilities;
Amendment 399 #
Proposal for a directive
Article 1 – paragraph 1 – point 4
Article 1 – paragraph 1 – point 4
Directive 2013/34/EU
Article 19(b) – point 2
Article 19(b) – point 2
(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, 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, the European Convention on Human Rights and its additional protocols, the UNECE Convention on Access to Information, Public Participation in Decision Making and Access to Justice in Environmental Matters (Aarhus Convention) and Resolution 48/13 adopted by the Human Rights Council on the 8 October 2021 on the human right to a clean, healthy environment.
Amendment 403 #
Proposal for a directive
Article 1 – paragraph 1 – point 4
Article 1 – paragraph 1 – point 4
Directive 2013/34/EU
Article 19(b) – point 2
Article 19(b) – point 2
(iii a) The undertaking's value chain linked to severe actual and potential impacts, including sector-specific information on suppliers, types of products and services supplied, and on sourcing and traceability of commodities and materials associated with high likelihood of actual and potential adverse impacts on sustainability matters.
Amendment 408 #
Proposal for a directive
Article 1 – paragraph 1 – point 4
Article 1 – paragraph 1 – point 4
Directive 2013/34/EU
Article 19(b) – point 2
Article 19(b) – point 2
(i) the role of the undertaking’s administrative, management and supervisory bodies, including with regard to sustainability matters, and their composition, including with regards to the representation of workers, women and persons with disabilities, from different ages, and with different ethnic, educational and professional backgrounds;
Amendment 413 #
Proposal for a directive
Article 1 – paragraph 1 – point 4
Article 1 – paragraph 1 – point 4
Directive 2013/34/EU
Article 19(b) – point 2
Article 19(b) – point 2
(i a) the number of workers and the type of arrangement they are engaged under by the undertaking, including through its operations and business activities, disaggregated by gender;
Amendment 415 #
Proposal for a directive
Article 1 – paragraph 1 – point 4
Article 1 – paragraph 1 – point 4
Directive 2013/34/EU
Article 19(b) – point 2
Article 19(b) – point 2
(i b) the recognition of trade unions, existence of collective agreements and the coverage of workers therein, and the existence of work councils, including European, SE and SCE work councils, and the representation of workers and women on supervisory and management boards;
Amendment 428 #
Proposal for a directive
Article 1 – paragraph 1 – point 4
Article 1 – paragraph 1 – point 4
Directive 2013/34/EU
Article 19(b) – point 2
Article 19(b) – point 2
Amendment 429 #
Proposal for a directive
Article 1 – paragraph 1 – point 4
Article 1 – paragraph 1 – point 4
Directive 2013/34/EU
Article 19(b) – point 2
Article 19(b) – point 2
2 a. The sustainability reporting standards referred to in paragraph 1 shall include an evaluation mechanism (based on qualitative information and indicators) which makes the disclosed sustainability information comparable between companies and allows for the quantitative rating of corporate sustainability performance as abase for public procurement, State Aid and other policy measures.
Amendment 440 #
Proposal for a directive
Article 1 – paragraph 1 – point 4
Article 1 – paragraph 1 – point 4
Directive 2013/34/EU
Article 19(b)a
Article 19(b)a
Amendment 441 #
Proposal for a directive
Article 1 – paragraph 1 – point 4
Article 1 – paragraph 1 – point 4
Directive 2013/34/EU
Article 19(b)b
Article 19(b)b
3 b. Sustainability reporting related to Regulation (EU) 2020/852 1. Any undertaking which is subject to an obligation to publish non-financial information pursuant to Article 8 of Regulation (EU) 2020/852 shall include information on how and to what extent the undertaking’s activities are associated with economic activities that do not qualify as environmentally sustainable under Articles 3 and 9 of Regulation(EU) 2020/852. 2. In particular, non-financial undertakings shall disclose the following: (a) the proportion of their turnover derived from products or services associated with, and the proportion of their capital expenditure and the proportion of their operating expenditure related to assets or processes associated with, economic activities that do not meet the criteria for substantial contribution to any of the environmental objectives in accordance with articles 10.3 (a), 11.3 (a), 12.2 (a), 13.2 (a),14.2(a) and 15.2 (a) of Regulation (EU) 2020/852; but do meet the criteria to avoid significant harm to environmental objectives in accordance with articles10.3 (b), 11.3 (b), 12.2 (b), 13.2 (b), 14.2(b) and 15.2 (b) of Regulation (EU) 2020/852; economic activities for which no technical screening criteria have been established by Regulation (EU) 2020/852 shall be included in this proportion; (b) the proportion of their turnover derived from products or services associated with, and the proportion of their capital expenditure and the proportion of their operating expenditure related to assets or processes associated with, economic activities that do not meet the criteria for substantial contribution to any of the environmental objectives in accordance with articles 10.3 (a), 11.3 (a), 12.2 (a), 13.2 (a),14.2(a) and 15.2 (a) of Regulation (EU) 2020/852; nor the criteria to avoid significant harm to environmental objectives in accordance with articles 10.3(b), 11.3 (b), 12.2 (b), 13.2 (b), 14.2(b) and 15.2 (b) of Regulation(EU) 2020/852. By 31October 2022, the Commission shall adopt a delegated act in accordance with Article XX to supplement paragraphs 1 and 2 of this Article to specify the content and presentation of the information to be disclosed pursuant to those paragraphs, including the methodology to be used, taking into account the specificities of both financial and non-financial undertakings and the technical screening criteria established pursuant to Regulation (EU) 2020/852.
Amendment 442 #
Proposal for a directive
Article 1 – paragraph 1 – point 4
Article 1 – paragraph 1 – point 4
Directive 2013/34/EU
Article 19(b)c
Article 19(b)c
Amendment 453 #
Proposal for a directive
Article 1 – paragraph 1 – point 4
Article 1 – paragraph 1 – point 4
Directive 2013/34/EU
Article 19(c)
Article 19(c)
The Commission shall adopt delegated acts in accordance with Article 49 to provide for sustainability reporting standards proportionate to the capacities and characteristics of small and medium-sized undertakings. Those sustainability reporting standards shall specify which information referred to in Articles 19a and 29ahow small and medium-sized undertakings referred to in Article 2, point (1)(a) shall report on information referred to in Articles 19a and 29a. They shall take into account the criteria set out in Article 19b, paragraphs 2 and 3. They shall also, where relevant, specify the structure in which that information shall be reported.
Amendment 460 #
Proposal for a directive
Article 1 – paragraph 1 – point 4
Article 1 – paragraph 1 – point 4
Directive 2013/34/EU
Article 19(d)
Article 19(d)
1 a. Electronic financial statements and management reports shall follow relevant access requirements laid down in the Directive 2019/882 on the accessibility requirements for products and services.
Amendment 465 #
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(1)
Article 20(1)
(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, ethnic background, or educational and professional backgrounds or disabilities, the objectives of that diversity policy, how it has been established and 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 471 #
Proposal for a directive
Article 1 – paragraph 1 – point 7
Article 1 – paragraph 1 – point 7
Directive 2013/34/EU
Article 29(a) – point 2
Article 29(a) – point 2
(a) a brief description of the group's business model and strategy, including:
Amendment 472 #
Proposal for a directive
Article 1 – paragraph 1 – point 7
Article 1 – paragraph 1 – point 7
Directive 2013/34/EU
Article 29(a) – point 2
Article 29(a) – point 2
(i) the resilience of the group's business model and strategy to short, medium and long-term risks related to all sustainability matters including economic disruptions, transitional and financial impacts and regulatory impacts;
Amendment 475 #
(ii) the short, medium and long-term opportunities for the group related to sustainability matters;
Amendment 482 #
Proposal for a directive
Article 1 – paragraph 1 – point 7
Article 1 – paragraph 1 – point 7
Directive 2013/34/EU
Article 29(a) – point 2
Article 29(a) – point 2
(iv) how the group’s business model and strategy take account of the interests of the group’s stakeholders and of the impacts of the group on sustainability matters and related targets, in connection with principle risks and opportunities have been integrated into the undertaking’s strategy;
Amendment 486 #
Proposal for a directive
Article 1 – paragraph 1 – point 7
Article 1 – paragraph 1 – point 7
Directive 2013/34/EU
Article 19(a) – point 2
Article 19(a) – point 2
(b) a description of the time-bound, short, medium and long-term, targets related to sustainability matters set by the group with respect to the group's principle risks and opportunities, whether such targets are evidence or science-based, and of the progress of the undertaking has made towards achieving themose targets including: (i) a clearly defined path to reach the targets and corresponding time frames (ii) the methods, main data and rationale used in setting these targets; (iii) the reasons explaining the impossibility any failure to reach intermediary and final targets;
Amendment 490 #
Proposal for a directive
Article 1 – paragraph 1 – point 7
Article 1 – paragraph 1 – point 7
Directive 2013/34/EU
Article 19(a) – point 2
Article 19(a) – point 2
(c) a description of the role of the administrative, management and supervisory bodies with regard to sustainability matters; , including: (i) the extent to which these bodies shall take into consideration sustainability matters and, where appropriate, the resources at their disposal in order to do so; (ii) the consistency of the remuneration schemes of their members with the company's sustainability strategy; (iii) discussions on the results of the due diligence process implemented with regard to sustainability matters and on adverse effects, as well as involvement and exchanges with the different stakeholders affected by the identified impacts; (iv) discussions on the principal risks to the undertaking and opportunities for the undertaking with regard to sustainability matters; (v) the process set up to oversee the implementation of the undertaking’s strategy related to sustainability matters; (vi) expertise on sustainability matters of the members of the administrative, management and supervisory bodies; (vi) the matters addressed by these bodies during the reporting period
Amendment 495 #
Proposal for a directive
Article 1 – paragraph 1 – point 7
Article 1 – paragraph 1 – point 7
Directive 2013/34/EU
Article 29(a) – point 2
Article 29(a) – point 2
(d) a description of the group’s policies in relation to sustainability matters; with respect to identified risks and opportunities;
Amendment 497 #
(i) the due diligence process implemented with regard to sustainability matters including with regard to: - identification, assessment and prioritisation of actual and potential adverse impacts; - policies and measures for the prevention, cessation, mitigation or remediation of actual or potential adverse impacts; - tracking of the implementation of the process and its results; - identification and involvement of all adversely affected people; - alert mechanisms as well as complaints and grievances, including how they are received and used by different stakeholders and affected people; - the different actors involved in the development, implementation, monitoring and evaluation of the process at different stages, and the human, informational and financial resources available to them; - how the due diligence process complies with international standards and duty of care of the company concerning all matter related to sustainability;
Amendment 502 #
Proposal for a directive
Article 1 – paragraph 1 – point 7
Article 1 – paragraph 1 – point 7
Directive 2013/34/EU
Article 29(a) – point 2
Article 29(a) – point 2
(ii) the principal actual or potential adverse impacts connected with the group’s value chain, including its own operations, its products and services, its business relationships and its supply chain; including with regard to: - all people affected by those impacts with particular attention to persons who frequently face discrimination or are in a vulnerable situation, such as women, children, minorities, LGBTIQ persons, persons with disabilities or persons experiencing poverty, especially the 20% poorest, or social exclusion ; - the effect of the undertaking’s business policies, practices and decisions on the identified issues, including of the undertaking’s purchasing policies and practices;
Amendment 507 #
Proposal for a directive
Article 1 – paragraph 1 – point 7
Article 1 – paragraph 1 – point 7
Directive 2013/34/EU
Article 29(a) – point 2
Article 29(a) – point 2
(iii) any actions taken, including in the application of the due diligence process, and the result of such actions, to prevent, mitigate or remediate actual or potential adverse impacts and the effectiveness of their results;
Amendment 525 #
Proposal for a directive
Article 1 – paragraph 1 – point 7
Article 1 – paragraph 1 – point 7
Directive 2013/34/EU
Article 29(a) – point 3
Article 29(a) – point 3
Amendment 530 #
Proposal for a directive
Article 1 – paragraph 1 – point 7
Article 1 – paragraph 1 – point 7
Directive 2013/34/EU
Article 29(a) – point 5
Article 29(a) – point 5
Amendment 533 #
Proposal for a directive
Article 1 – paragraph 1 – point 7
Article 1 – paragraph 1 – point 7
Directive 2013/34/EU
Article 29(a) – point 7
Article 29(a) – point 7
Amendment 552 #
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
Article 34
(aa) where applicable, express an opinion based on a limited assurance or, where applicable, reasonable 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 556 #
Proposal for a directive
Article 1 – paragraph 1 – point 10 a (new)
Article 1 – paragraph 1 – point 10 a (new)
Directive 2013/34/EU
Article 41 – point 1
Article 41 – point 1
(10 a) Article 41 is amended as follows: (a) point (1) is replaced by the following: (1) ‘undertaking active in the extractive industry’ means an undertaking with any activity involving the exploration, prospection, discovery, development, extraction, or the physical trading of minerals, oil, natural gas, or other materials, within the economic activities listed in Section B, Divisions 05 to 08 and Section G, Divisions46.71 and 46.72 of Annex I to Regulation (EC)No 1893/2006 of the European Parliament and of the Council of 20 December 2006establishing the statistical classification of economic activities NACE Revision 2.
Amendment 559 #
Proposal for a directive
Article 1 – paragraph 1 – point 11 – point a
Article 1 – paragraph 1 – point 11 – point a
Directive 2013/34/EU
Article 49 point 2
Article 49 point 2
2. The power to adopt delegated acts referred to in Article 1(2), Article 3(13), and Article 46(2), Article 19b and Article 19c shall be conferred on the Commission for an indeterminate period of time.
Amendment 560 #
Proposal for a directive
Article 1 – paragraph 1 – point 11 – point a
Article 1 – paragraph 1 – point 11 – point a
Directive 2013/34/EU
Article 49 point 3
Article 49 point 3
Amendment 562 #
Proposal for a directive
Article 1 – paragraph 1 – point 11 – point b – introductory part Directive 2013/34/EU
Article 1 – paragraph 1 – point 11 – point b – introductory part Directive 2013/34/EU
(b) the following paragraph -3a and 3a is inserted:
Amendment 563 #
Proposal for a directive
Article 1 – paragraph 1 – point 11 – point b
Article 1 – paragraph 1 – point 11 – point b
Directive 2013/34/EU
Article 49 point 3
Article 49 point 3
-3a. The power to adopt delegated acts referred to in Article(s) Article 19b and Article 19c, shall be conferred on the Commission for a period of three years from … [date of entry into force of the basic legislative act or any other date set by the co-legislators]. The Commission shall draw up a report in respect of the delegation of power not later than nine months before the end of the three-year period. The delegation of power shall be tacitly extended for periods of an identical duration, unless the European Parliament or the Council opposes such extension not later than three months before the end of each period.
Amendment 564 #
Proposal for a directive
Article 1 – paragraph 1 – point 11 – point b
Article 1 – paragraph 1 – point 11 – point b
Directive 2013/34/EU
Article 49
Article 49
3a. When adopting delegated acts pursuant to Articles 19b and 19c, the Commission shall take into consideration technical advice from EFRAGCSRB, provided such advice has been developed with proper due process, public oversight and transparency and with the expertise of relevant stakeholders, and is accompanied by cost-benefit analyses that include analyses of the impacts of the technical advice on sustainability matters. The Commission shall consult the Member State Expert Group on Sustainable Finance referred to in Article 24 of Regulation (EU) 2020/852 on the technical advice provided by ECSRB prior to the adoption of the delegated acts referred to in Articles 19b and 19c. The Commission shall request the opinion of the European Securities and Markets Authority on the technical advice provided by ECSRB, in particular with regard to its consistency with Regulation (EU) 2019/2088 and its delegated acts. The European Securities and Markets Authority shall provide its opinion within two months from the date of receipt of the request from the Commission. The Commission shall also consult all other relevant EU bodies, including 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 established pursuant to Article 20 of Regulation (EU)2020/852, Eurofound, EIGE, EU-OSHA and other relevant EU agencies as well as relevant stakeholders, including trade unions and civil society organisations on the technical advice provided by ECSRD prior to the adoption of delegated acts referred to in Articles 19b and 19c. 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.
Amendment 573 #
Proposal for a directive
Article 1 – paragraph 1 – point 11 a (new)
Article 1 – paragraph 1 – point 11 a (new)
(11 a) (11a) The following Article 50a is inserted: Article 50a Complaint procedure Member States shall organise an effective system of complaints for users to report violations by an undertaking of the obligations related to the assurance of sustainability reporting. The complaint may be directed simultaneously against the undertaking and the statutory auditor or the audit firm that has reviewed the undertaking’s sustainability reporting. In that case, Member States shall determine the respective responsibilities of the undertaking and of the statutory auditor or the audit firm involved during its examination of the alleged breach of the obligations related to sustainability reporting.
Amendment 578 #
Proposal for a directive
Article 1 – paragraph 1 – point 12
Article 1 – paragraph 1 – point 12
Directive 2013/34/EU
Article 51 – point 2
Article 51 – point 2
(c a) new injunction under penalty (or fine)
Amendment 586 #
Proposal for a directive
Article 1 – paragraph 1 – point 12
Article 1 – paragraph 1 – point 12
Directive 2013/34/EU
Article 51 – point 3
Article 51 – point 3
(g a) the impaired ability of affected people and organisations, including non- governmental organisations and social partners, to hold undertakings to account for their impacts on people and the environment
Amendment 588 #
Proposal for a directive
Article 1 – paragraph 1 – point 12 a (new)
Article 1 – paragraph 1 – point 12 a (new)
Directive 2013/34/EU
Annex IIa
Annex IIa
Amendment 603 #
Proposal for a directive
Article 3 – paragraph 1 – point 16 a (new)
Article 3 – paragraph 1 – point 16 a (new)
(16 a) (16a) the following Article 30h is inserted: Article 30h Complaints procedure Member States shall organise an effective system of complaints for users in case of a violation by a statutory auditor or an audit firm of the requirements related to the assurance of sustainability reporting. The complaint may be directed simultaneously against the undertaking and the statutory auditor or the audit firm that has reviewed the undertaking’s sustainability reporting. In that case, Member States shall determine the respective responsibilities of the undertaking and of the statutory auditor or the audit firm involved during its examination of the alleged breach of the obligations related to sustainability reporting.