Activities of Heidi HAUTALA related to 2021/0104(COD)
Shadow opinions (1)
OPINION on the proposal for a directive of the European Parliament and of the Council amending Directive 2013/34/EU, Directive 2004/109/EC, Directive 2006/43/EC and Regulation (EU) No 537/2014, as regards corporate sustainability reporting
Legal basis opinions (0)
Amendments (12)
Amendment 56 #
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, climate, social and employee mattersworkers' 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 57 #
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 should 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 stakeholderrespect 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 59 #
Proposal for a directive
Recital 27 a (new)
Recital 27 a (new)
(27 a) Human rights defenders are vital to ensuring corporate respect for human rights and the healthy environment that many rights rely on. They document the negative human rights and environmental impacts of business activities; bring such impacts to the attention of States and the private actors involved and identify factors, which may contribute to such impacts; propose solutions to these contributing factors and support affected communities seeking remedy and justice in cases where negative human rights and environmental impacts have occurred along company value chains. Human rights defenders are an important stakeholder group the consultation of which may significantly help and benefit undertakings in the exercise of their sustainability reporting and due diligence duty. Therefore, information on intangibles disclosed according to Article 19a, paragraphs 1 and 2, shall contain information on the undertaking's liaison with individuals and groups that identify as human rights defenders as recognized in the UN Declaration on human rights defenders.
Amendment 61 #
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. _________________ 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)Commission 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.
Amendment 69 #
Proposal for a directive
Recital 43
Recital 43
(43) Sustainability reporting standards should specify the information that undertakings should disclose on social factors, including employee factors and human rights. Such information should cover the impacts of undertakings on people, including on human health. The information that undertakings disclose about human rights should include information about forced labour in their value chains where 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, particularly on child and forced labour, and the Charter of Fundamental Rights of the European Union.
Amendment 70 #
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, 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. As a part of information about undertakings' internal control and risk management systems as well as its corporate culture and approach to business ethics, users also need information on how an undertaking manages communication and contacts with individuals and organisations such as whistle-blowers, journalists, trade unions, civil society organisations and human rights defenders that raise concerns related to the identification, assessment, prevention and/or mitigation of environmental, social or governance risks in the undertaking's operations, products and services, its business relationships and its value and supply chain. In particular, users need information on what measures an undertaking has taken to afford protection to, legal or otherwise, and to mitigate the risk of retaliation against individuals and organisations. 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 79 #
Proposal for a directive
Article 1 – paragraph 1 – point 3
Article 1 – paragraph 1 – point 3
Directive 2013/34/EU
Article 19a – paragraph 1
Article 19a – paragraph 1
1. 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 85 #
Proposal for a directive
Article 1 – paragraph 1 – point 3
Article 1 – paragraph 1 – point 3
Directive 2013/34/EU
Article 19a – paragraph 2 – subparagraph 1 – point f a (new)
Article 19a – paragraph 2 – subparagraph 1 – point f a (new)
(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 86 #
Proposal for a directive
Article 1 – paragraph 1 – point 3
Article 1 – paragraph 1 – point 3
Directive 2013/34/EU
Article 19a – point 3 – subparagraph 2
Article 19a – point 3 – subparagraph 2
Where appropriate, 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, in particular in high-risk sectors.
Amendment 92 #
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 i
Article 19b – paragraph 2 – subparagraph 2 – point b – point i
(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 94 #
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 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 97 #
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)
(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.