Driving Sustainable Profitability in Europe

10. 3. 2016
Frank Bold, with the support of ACCA (the Association of Chartered Certified Accountants), organised a roundtable on responsible investment and reporting. The event was particularly relevant in view of the two current consultations published by the European Commission on non-financial reporting and long-term and sustainable investment.

The consultations served as a basis for the debate on EU policy developments and the role of business, investors and civil society in fostering a sustainable economy and responsible business behaviour.

If you are interested in reading more details about the discussion, you can consult the report of the event via this link: Driving Sustainable Profitability in Europe

The topics addressed include:
  • Status of national transposition processes
  • Overview of Commission’s process to develop guidelines for Member States
  • Overview of key provisions of the consultation
  • Open discussion of realistic expectations of EU guidelines
  • Discussion of strategy to reform corporate governance in the EU to facilitate sustainability and responsibility of corporations and capital markets
Agenda of the event:

1.00 pm Registration, sandwich lunch

1.30 pm Introductory remarks by Will Martindale, Head of Policy, UN Principles for Responsible Investment

2.00 pm Panel on long-term and sustainable investment

  • Zsofia Kerecsen, Policy Officer, DG Justice, European Commission
  • Flavia Micilotta, Executive Director, EUROSIF
  • Óphelie Mortier, SRI Coordinator at Bank Degroofpetercam
  • Chair: Paige Morrow, Head of Brussels Operations at Frank Bold

3.00 pm Panel on non-financial reporting guidance

  • Nicolas Bernier-Abad, Policy Officer, DG FISMA, European Commission
  • Richard Martin, Head of Corporate Reporting, ACCA
  • Michel Bande, Senior Executive Vice President, Solvay
  • Chair: Filip Gregor, Head of the Responsible Companies Section at Frank Bold

4.00 pm Open discussion

4.30 pm Tea and networking

Background information:

Pursuant to the Non-Financial Reporting (NFR) Directive, large public-interest undertakings (in essence, publicly traded corporations, banks and insurers) with more than 500 employees will be required to disclose information on policies, risks and outcomes regarding environmental, social and employee matters; respect for human rights, anti-corruption and bribery issues; and board diversity.

The NFR Directive will increase corporate transparency and the consistency, reliability and comparability of non-financial information for approximately 6,000 large European enterprises. There remains a need to provide guidance to Member States to define key concepts, and clarify the required scope of disclosure. Therefore, the Commission is undertaking a consultation process that will result in non-binding guidelines on the methodology for reporting. The executive branch of the EU has indicated that its guidelines will be a reference document rather than a detailed, operational instrument.

The NFR Directive can have incremental effect on the relationship between public corporations and investors, but it conflicts with the overall structure of corporate governance regulation in the EU, which is implicitly built on maximisation of shareholder value as measured through short-term returns and share price. The existing regulatory framework facilitates capital market pressure for maximum return on investment in the shortest possible time. Civil society, academic, and even business initiatives have suggested ways how to reform corporate governance, ranging from clarification of fiduciary duties, and corporate purpose, to facilitating access to capital for sustainable corporations, to improved metrics for directors remuneration and for measuring corporate performance.  

Relevant consultations:

1) Consultation on long-term and sustainable investment (published by DG JUSTICE on 18 December 2015, here), with deadline 25 March 2016

2) Consultation on a guideline on non-financial reporting (published by DG FISMA on 15 January 2016, here), with deadline 15 April 2016.

 *Cover picture (CC) Flickr Carmine Shot

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The Purpose of the Corporation Project

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