Non-Financial Reporting Directive (NFRD)

The Non-Financial Reporting Directive (NFRD) is a guideline on non-financial reporting that legally defines important principles for sustainability reporting by large companies.

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Definition:

Non-Financial Reporting Directive (NFRD)

Definition:

Non-Financial Reporting Directive (NFRD)

The Non-Financial Reporting Directive (NFRD), as a guideline on non-financial reporting, legally defines important principles for sustainability reporting by large companies and was implemented in the EU in 2017. The EU directive requires large listed companies as well as banks and insurance companies with more than 500 employees to add sustainability disclosures to their existing management reports. The reporting is intended to give investors and consumers, as well as other stakeholders, the opportunity to learn more about material non-financial aspects such as the company's operations and environmental impact. However, analyses conducted by the EU Commission revealed that a large number of stakeholders would like to see the reporting requirements and content extended to other categories of companies. In addition, the EU Commission proposes to extend the scope of the directive to listed SMEs, as only around 11,000 companies are currently affected by the NFRD. Therefore, a planned renewal of the CSR Directive is to take place through the CSRD, which is to extend the scope of application and define a more comprehensive reporting standard for sustainability in companies.

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