The EU and the US are rethinking their non-financial disclosure requirements and announcing a series of new ESG-related interventions

As announced under the bold European Green Deal, the European Commission has launched a public consultation on the review of the Non-Financial Reporting Directive (NFRD). The NFRD sets out the rules for disclosing non-financial information by large companies as required by the Directive 2014/95/EU. The survey will remain open to stakeholders until 14 May 2020. To access the survey, please open the link below:

Moreover, to respond to recent legislative and market developments, the European Securities and Market Authority (ESMA) launched on 6 February 2020 its Sustainable Finance Strategy. The ESMA will take ESG factors into account across all its activities, monitor and assess ESG-related market developments and ESG-related risks, as well as include environmental-related systemic risk in its stress test scenarios.

Later last week, on 20 February 2020, the European Commission published a detailed study (572 pages) on due diligence requirements through the supply chain. The study focuses on due diligence requirements to identify, prevent or mitigate adverse corporate impacts such as abuses of human rights or environmental damage.

On 30 January 2020,  the US Securities and Exchange Commission (SEC) has proposed amendments to disclosure requirements in Regulation S-K, which sets out reporting requirements for issuers. Amendments include: eliminating financial data (Item 302), and amending management’s discussion and analysis (Item 303). The Principles for Responsible Investment (PRI) has announced that it will issues a response to SEC on the matter.

For further information, please see the following links: