2021/0104(COD) | [ParlTrack]

Proposal for a directive
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 , including the KPIs already featured in the guidelines. They should also take account of other reporting requirements in Directive 2013/34/EU 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 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 101 #

Proposal for a directive
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~~ensure consistency with 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). 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~~be based, as far as possible, on global equivalent sustainab~~ility~~le reporting standards ~~at global level~~.

Amendment 102 #

Proposal for a directive
Recital 38

(38) In its communication on the European Green Deal, the European Commission committed to support businesses and other stakeholders in developing standardised natural capital accounting practices within the Union and internationally, with the aim of ensuring appropriate management of environmental risks and mitigation opportunities, and reduce related transaction costs. The Transparent Project sponsored under the LIFE programme is developing the first natural capital accounting methodology, which will make existing methods easier to compare and more transparent while lowering the threshold for companies to adopt and use the systems in support of future-proofing their business. The Natural Capital Protocol is also an important reference in this field. While natural capital accounting methods serve principally to strengthen internal management decisions, they should be duly considered when establishing sustainability reporting standards, if the above-mentioned Transparent Project and Natural Capital Protocol are made binding, once the pilot phases have been completed. Some natural capital accounting methodologies seek to assign a monetary value to the environmental impacts of companies’ activities, which may help users to better understand those impacts. It is therefore appropriate that sustainability reporting standards should be able to include monetised indicators of sustainability impacts if that is deemed necessary, once the above-mentioned projects have been validated.

Amendment 103 #

Proposal for a directive
Recital 39

(39) Sustainability reporting standards should also take account of internationally recognised principles and frameworks on responsible business conduct, corporate social responsibility, and sustainable development, including the UN Sustainable Development Goals, the UN Guiding Principles on Business and Human Rights, the OECD Guidelines for Multinational Enterprises, the OECD Due Diligence Guidance for Responsible Business Conduct and related sectoral guidelines, the UN Global Compact, the Tripartite Declaration of Principles of the International Labour Organisation concerning Multinational Enterprises and Social Policy, the ISO 26000 standard on social responsibility, and the UN Principles for Responsible Investment, although those instruments are not binding.

Amendment 104 #

Proposal for a directive
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. Regulation (EU) 2020/852 provides a classification of the environmental objectives of the Union. For reasons of coherence, it is appropriate 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. These reporting standards must take into account the size of the undertaking, so that they do not pose an excessive burden for small and medium-sized enterprises.

Amendment 105 #

Proposal for a directive
Recital 42 a (new)

(42a) Achieving a climate neutral economy is also posing significant risk to employment levels and quality, especially in transition sectors and regions. Therefore, undertakings in those sectors and regions should also report on possible risks and negative trends regarding employment and incomes, due to flaws in the transition process.

Amendment 106 #

Proposal for a directive
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, and the Charter of Fundamental Rights of the European Union. working conditions, workers’ rights, social partners’ involvement, collective bargaining, trade union and human rights. Such information should be disclosed on a country-by- country basis, with close involvement of social partners and easily accessible to trade unions and civil society organisations for reporting and auditing requirements. Such information should cover the impacts of undertakings on workers and people, including on human health, affected communities, consumers and end-users. The information that undertakings disclose about human rights, fundamental freedoms and democratic principles should include information about forced labour, child labour, freedom of expression, access to clean water and sanitation, adequate housing, privacy, freedom of association and collective bargaining in their 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. These reporting standards should refer to equal opportunities for all, including gender equality and equal pay for equal work, training and skills development, employment and inclusion of people with disabilities, as well as and working conditions, with a focus on secure employment, wages, social dialogue, collective bargaining, respect for trade union rights and respect of workers’ right to be informed and consulted prior to final decisions on matters of significance importance to the workforce. 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 as well as other conventions such as on collective bargaining, on workers' representation, working time, minimum wage protection, Occupational Heath and Safety and labour inspection services and the ILO´s Tripartite Declaration of Principles concerning Multinational Enterprises and Social Policy and the European Convention on Human Rights and the European Social Charter (revised) of the Council of Europe, the OECD Guidelines for Multinational Enterprises, and the Charter of Fundamental Rights of the European Union. Sustainability and social reporting should be carried out in close cooperation with appropriate worker representative bodies, according to EU labour law acquis and national law and practice, at relevant steps, for design, control and audit purposes. Workers’ representatives, and their trade unions, are to be provided with the necessary means and resources, including support of an expert, to enforce rights and obligations arising from this directive; The social standards of the Global Reporting Initiative which are already used should be included in this directive as one source of minimum standards in particular GR-401 till GR- 407; Social factors are the core of social reporting. There is no existing legislative act we can refer to so this social factors should be included and defined in this directive in a democratic process of the co-legislators. After the adoption of the most important social factors by the co- legislators the Commission may add this by delegated acts; If doing so the Commission may receive advice from the European Financial Reporting Advisory Group (EFRAG), a non-profit association under Belgian law solely dealing with financial reporting. Because in this Directive the reporting of environmental factors and of social factors have been added, the composition of stakeholders to be consulted by the Commission should be changed. If the Commission may continue to receive advice from EFRAG this group would need to be adapted in a tri-partite structure following this Directive to have experts on financial reporting but also on reporting on environmental factors from the relevant organisations and experts on reporting on social factors from Trade Unions and Civil Society organisations; The participation of EFRAG should be financed publicly to ensure equal access and to avoid discrimination;

Amendment 107 #

Evelyn REGNER, Marc ANGEL, Gabriele BISCHOFF, Manuel PIZARRO, Vilija BLINKEVIČIŪTĖ, Milan BRGLEZ, Alicia HOMS GINEL, Estrella DURÁ FERRANDIS, Aurore LALUCQ, Pierfrancesco MAJORINO, Agnes JONGERIUS, Elisabetta GUALMINI

Proposal for a directive
Recital 43

Amendment 108 #

Proposal for a directive
Recital 43

(43) Sustainability reporting standards should specify the information that undertakings should disclose on social factors, including ~~employee factors~~workers' rights, diversity, inclusion, gender equality and human rights. Such information should cover the impacts of undertakings on people, ~~including~~especially its workers and local communities and on human health in general. The information that undertakings disclose about human rights should include information about forced labour and child 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 decent 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, such as the UN Convention on the Rights of Persons with Disabilities and the UN Convention on the Rights of the Child and the UN Declaration on the Rights of Indigenous Peoples, 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 109 #

Sylvie BRUNET, Dragoş PÎSLARU, Stéphane BIJOUX, Marie-Pierre VEDRENNE, Atidzhe ALIEVA-VELI, Véronique TRILLET-LENOIR

Proposal for a directive
Recital 43

(43) Sustainability reporting standards should specify the information that undertakings should disclose on social factors, including ~~employee factors and~~workers' social and labour rights, equality, diversity and inclusion as well as human rights. Such information should cover the impacts of undertakings on its workers, 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 fair 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 110 #

Proposal for a directive
Recital 43

Amendment 111 #

Proposal for a directive
Recital 43

Amendment 112 #

Proposal for a directive
Recital 43 a (new)

(43a) Also anti-discrimination and gender equality are an integral part of sustainability matters, they are often underreported with significant negative impacts on equal opportunities on the labour market and the governance of enterprises as well as society as a whole. Hence, they need to be integrated in sustainability reporting standards.

Amendment 113 #

Proposal for a directive
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~~, notably equal opportunities, anti- discrimination and inclusive measures, prevention of work-place violence and harassment as well as the undertaking’s 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 114 #

Proposal for a directive
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 review the standards every 3 years to take account of relevant developments, including the development of international standards, and the list of high-risk sectors based on a delegated act every two years.

Amendment 115 #

Proposal for a directive
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 20223. 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 20234, 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 review the standards every 35 years to take account of relevant developments~~, including~~. The Commission may, when necessary, amend the standards to align them with the development of international standards.

Amendment 116 #

Proposal for a directive
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, as per the Directive 2019/882 on the accessibility requirements for products and services. 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 117 #

Proposal for a directive
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, notably for persons with disabilities following Directive 2019/882. 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 118 #

Proposal for a directive
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 progress towards a more gender-balanced participation in economic decision-making and gender equality in general, it is necessary to ensure that undertakings with securities listed on regulated markets always report on their gender diversity policies, especially with regards to women on boards, and the implementation thereof. However, to avoid unnecessary 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 119 #

Proposal for a directive
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 progress towards a more ~~gender-~~balanced participation in terms of non- discrimination on grounds of sex in economic decision-making, it is necessary to ensure that undertakings with securities listed on regulated markets always report on their ~~gender diversity policies~~policies on non-discrimination on grounds of sex and the implementation thereof. However, to avoid unnecessary 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 120 #

Proposal for a directive
Recital 53

(53) The assurance profession distinguishes between limited and reasonable assurance engagements. The conclusion of a limited assurance engagement is usually provided in a negative form of expression by stating that no matter has been identified by the practitioner to conclude that the subject matter is materially misstated. The auditor performs fewer tests than in a reasonable assurance engagement. The amount of work for a limited assurance engagement is therefore less than for reasonable assurance. The work effort in a reasonable assurance engagement entails extensive procedures including consideration of internal controls of the reporting undertaking and substantive testing, and is therefore significantly higher than in a limited assurance engagement. The conclusion of this type of engagement is usually provided in a positive form of expression and states an opinion on the measurement of the subject matter against previously defined criteria. Article 19a(5) and Article 29a(5) of Directive 2013/34/EU require Member States to ensure that the statutory auditor or audit firm checks whether the non-financial statement or the separate report has been provided. It does not require that an independent provider of assurance services verifies the information, although it allows Member States to require such verification where they wish to. The absence of an assurance requirement on sustainability reporting, in contrast to the requirement for the statutory auditor to perform a reasonable assurance engagement on financial statements, would threaten the credibility of the sustainability information disclosed, thus failing to meet the needs of the intended users of that information. Although the objective is to have a similar level of assurance for financial and sustainability reporting, the absence of a commonly agreed standard for the assurance of sustainability reporting creates the risk of different understandings and expectations of what a reasonable assurance engagement would consist of for different categories of sustainability information, especially with regard to forward looking and qualitative disclosures. Therefore, ~~a progressive approach to enhance~~ the level of the assurance required for sustainability information ~~should be considered, starting with an obligation on the statutory auditor or audit firm to express an opinion about the compliance of the sustainability rep~~, including on workers’ rights and wortking with Union requirements based on a limited assurance engagement. This opinion should cover the compliance of the sustainability reporting with Union sustainability reporting standards, the process carried out by the undertaking to identify the information reported pursuant to the sustainability reporting standards and compliance with the requirement to mark-up sustainability reporting. The auditor should also assess whether the undertaking’s reporting complies with the reporting requirements of Article 8 of Regulation (EU) 2020/852conditions should be enhanced to the level of reasonable assurance. To guarantee a common understanding and expectations of what a reasonable assurance engagement would consist of, the statutory auditor or audit firm should be required to express an opinion based on a reasonable assurance engagement about the compliance of the sustainability reporting with Union requirements, should the Commission adopt assurance standards for reasonable assurance of sustainability reporting. This would also allow for the progressive development of the assurance market for sustainability information, and of undertakings’ reporting practices. Finally, this progressive approach would phase in the increase in costs for reporting undertakings, given that reasonable assurance is more costly than limited assurance.

Amendment 121 #

(69) According to Article 51 of Directive 2013/34/EU, the enforcement of corporate reporting by undertakings the securities of which are not listed on regulated markets is carried out by Member States. The types of sanctions are, however, not specified, which means that sanctioning regimes can vary widely between Member States, so undermining the single market. To improve sustainability reporting in the internal market and to contribute to the transition towards a fully sustainable and inclusive economic and financial system in which the benefits of growth are broadly shared in accordance with the European Green Deal and its just transition, Member States should provide for certain sanctions and administrative measures in the case of infringements of sustainability reporting requirements. The sanctioning regime of Directive 2013/34/EU should therefore be strengthened accordingly, whereby Member States are to provide for appropriate sanctions and administrative measures.

Amendment 122 #

Sylvie BRUNET, Dragoş PÎSLARU, Stéphane BIJOUX, Marie-Pierre VEDRENNE, Véronique TRILLET-LENOIR

Proposal for a directive
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 administrative burden, and to publish the results of such assessments. Member States should consider introducing measures to support SMEs in applying the voluntary simplified reporting standards.deleted

Amendment 123 #

Proposal for a directive
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 administrative burden,~~ and to publish the results of such assessments. Member States should ~~consider~~ introduc~~ing~~e measures to support SMEs in applying the ~~voluntary simplified~~ reporting standards.

Amendment 124 #

Proposal for a directive
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 administrative burden, and to publish the results of such assessments. Member States should ~~consider~~ introduc~~ing~~e measures to support ~~SME~~undertakings in applying the ~~voluntary simplified~~ reporting standards.

Amendment 125 #

Sylvie BRUNET, Dragoş PÎSLARU, Stéphane BIJOUX, Marie-Pierre VEDRENNE, Véronique TRILLET-LENOIR

Proposal for a directive
Article 1 – paragraph 1 – point 1

Directive 2013/34/EU
Article 1 – paragraph 3 – introductory part

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, provided they are large undertakings exceeding on their balance sheet dates the criterion of the average number of 500 employees during the financial year :

Amendment 126 #

Proposal for a directive
Article 1 – paragraph 1 – point 1

Directive 2013/34/EU
Article 1 – paragraph 3 – introductory part

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, provided that they meet the criteria laid down in Article 19a(1), regardless of their legal form:

Amendment 127 #

Proposal for a directive
Article 1 – paragraph 1 – point 1

Directive 2013/34/EU
Article 1 – paragraph 3 – introductory part

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 and the undertakings defined in Article 19a(1) regardless of their legal form:

Amendment 128 #

Sylvie BRUNET, Dragoş PÎSLARU, Stéphane BIJOUX, Marie-Pierre VEDRENNE, Atidzhe ALIEVA-VELI, Véronique TRILLET-LENOIR

Proposal for a directive
Article 1 – paragraph 1 – point 2

Directive 2013/34/EU
Article 2 – point 20

(20) ‘independent assurance services provider’ means a conformity assessment body accredited in accordance with Regulation (EC) No 765/2008 of the European Parliament and of the Council*5 for the specific conformity assessment activity referred to in Article 34(1), second subparagraph, point (aa) of this Directive. (20a) ‘high-risk sector’ means a sector that is associated with a high likelihood of actual or potential severe impacts on sustainability matters. (20b) ‘high-risk areas means a geographical area that is associated with a high likelihood of actual or potential severe impacts on sustainability matters. (20c) ‘targets’ means measurable, specific, time-bound and, when applicable, science-based indicators

Amendment 129 #

Proposal for a directive
Article 1 – paragraph 1 – point 2

Directive 2013/34/EU
Article 2 – point 20 a (new)

(20a) ‘High-risk economic activity sector’ means economic activities likely to have serious negative impacts on sustainability matters

Amendment 130 #

Sylvie BRUNET, Dragoş PÎSLARU, Stéphane BIJOUX, Marie-Pierre VEDRENNE, Véronique TRILLET-LENOIR

1. 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~~ undertakings referred to in Article 3(7) which are governed by the law of a third country and are not established in the territory of the Union when they operate in the internal market selling goods or providing services under the arrangements set out in Article 19b(1), and, as of 1 January 2026, small and medium-sized undertakings which are undertakings referred to in Article 2, point (1), point (a), and medium-sized undertakings referred to in Article 3(3) which operate in one or more of the high- risk economic activities referred to in Article 19a(8), 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 131 #

Proposal for a directive
Article 1 – paragraph 1 – point 3

Directive 2013/34/EU
Article 19a – paragraph 1

1. ~~Large~~All undertakings ~~and, as of 1 January 2026~~, including undertakings referred to in Article 2, point (1), point (a), small and medium-sized undertakings ~~which are~~, undertakings re~~ferred to in Article 2, point (1), point (a),~~gistered as foundations, partnerships or similar structure fulfilling the criteria for undertakings and undertakings with their seat in a non-EU country having significant business in the EU4a 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, supply and value chain, performance and position. _________________ 4a European Parliament 2020/2137 (INI)

Amendment 132 #

Proposal for a directive
Article 1 – paragraph 1 – point 3

Directive 2013/34/EU
Article 19a – paragraph 1

1. Large undertakings, public interest entities and, as of 1 January 2026, 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 133 #

Proposal for a directive
Article 1 – paragraph 1 – point 3

Directive 2013/34/EU
Article 19a – paragraph 1

1. Large undertakings ~~and, as of 1 January 2026,~~, including small and medium-sized listed undertakings as of 1 January 2026, when subject to this Directive, which are undertakings referred to in Article 2, point (1), point (a), as well as high-impact undertakings, 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 134 #

Proposal for a directive
Article 1 – paragraph 1 – point 3

Directive 2013/34/EU
Article 19a – paragraph 1

(1) 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),~~ 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 135 #

Sylvie BRUNET, Dragoş PÎSLARU, Stéphane BIJOUX, Marie-Pierre VEDRENNE, Atidzhe ALIEVA-VELI, Véronique TRILLET-LENOIR

Proposal for a directive
Article 1 – paragraph 1 – point 3

Directive 2013/34/EU
Article 19a – paragraph 1

1. 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),~~which are public-interest entities exceeding on their balance sheet date the criterion of the average number of 500 employees during the financial year 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 136 #

Proposal for a directive
Article 1 – paragraph 1 – point 3

Directive 2013/34/EU
Article 19a – paragraph 1 a (new)

1a. In accordance with the EU labour law acquis and national law and practice, the central management shall consult with the trade unions and/or workers' representatives at the beginning of the reporting period on the reporting system and in the identification of risks and impacts of the undertaking on the environment and people. Trade unions and workers' representatives shall be provided with the adequate resources 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 EU law and national law and practice.

Amendment 137 #

Proposal for a directive
Article 1 – paragraph 1 – point 3

Amendments to Directive 2013/34/EU
Article 19a – paragraph 1 a (new)

1a. Irrespective of their size and legal status, undertakings in high-risk sectors as defined by the European Commission every second year via a delegated act, shall include in their management report measures taken to mitigate any identified risks and evaluate the effectiveness of these actions.

Amendment 138 #

Proposal for a directive
Article 1 – paragraph 1 – point 3

Amendments to Directive 2013/34/EU
Article 19a – paragraph 1 b (new)

1b. At the beginning of the reporting period, undertakings’ management shall inform and consult with the trade unions and workers’ representatives about the reporting system, indicators and verification. They shall also be consulted on potential risks and impacts identified regarding sustainability matters. Any opinion to the sustainability report by trade unions and workers’ representatives shall be annexed to the sustainability report.

Amendment 139 #

Proposal for a directive
Article 1 – paragraph 1 – point 3

Directive 2013/34/EU
Article 19 a – paragraph 2 – subparagraph 1 – introductory part

(2) TWhere appropriate, the information referred to in paragraph 1 shall contain in particular:

Amendment 140 #

Proposal for a directive
Article 1 – paragraph 1 – point 3

Directive 2013/34/EU
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;~~deleted

Amendment 141 #

Proposal for a directive
Article 1 – paragraph 1 – point 3

Directive 2013/34/EU
Article 19 a – paragraph 2 – subparagraph 1 – point a – point ii

(ii) the opportunities and risks for the undertaking related to sustainability matters; (iia) the assessment by the undertaking of its impacts on sustainability matters;

Amendment 142 #

Proposal for a directive
Article 1 – paragraph 1 – point 3

Directiva 2013/34/UE
Article 19 a – paragraph 2 – subparagraph 1 – point a – point ii

(ii) the ~~opportunitie~~strengths, weaknesses, opportunities and threats for the undertaking related to sustainability matters;

Amendment 143 #

Proposal for a directive
Article 1 – paragraph 1 – point 3

Directive 2013/34/EU
Article 19a – paragraph 2 – subparagraph 1 – point a – point iii

Amendment 144 #

Proposal for a directive
Article 1 – paragraph 1 – point 3

Directive 2013/34/EU
Article 19a – 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 Agreement; (iiia) the plans of the undertaking to ensure that its business model and strategy respect workers' rights and potentially affected communities

Amendment 145 #

Proposal for a directive
Article 1 – paragraph 1 – point 3

Directive 2013/34/EU
Article 19a – 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 just transition to a sustainable economy and with the limiting of global warming to 1.5 °C in line with the Paris Agreement;

Amendment 146 #

Proposal for a directive
Article 1 – paragraph 1 – point 3

Directive 2013/34/EU
Article 19a – paragraph 2 – subparagraph 1 – point a – point iii a (new)

(iiia) the plans of the undertaking to achieve diversity and gender equality, including pay transparency, equal pay for work or work of equal value, equal opportunities and diversity in its management;

Amendment 147 #

Proposal for a directive
Article 1 – paragraph 1 – point 3

Directive 2013/34/EU
Article 19a – paragraph 2 – subparagraph 1 – point a – point iv

~~(iv) how the undertaking’s business model and strategy take account of the interests of the undertaking’s stakeholders and of the impacts of the undertaking on sustainability matters;~~deleted

Amendment 148 #

Proposal for a directive
Article 1 – paragraph 1 – point 3

Directive 2013/34/EU
Article 19a – paragraph 2 – subparagraph 1 – point a – point iv

(iv) how the undertaking’s business model and strategy ensure decent work, fair wages, company training and further education of workers, information and consultation of workers and safeguard the rights of trade unions and take account of the interests of the undertaking’s stakeholders and of the impacts of the undertaking on sustainability matters along the entire supply and value chain;

Amendment 149 #

Proposal for a directive
Article 1 – paragraph 1 – point 3

Directive 2013/34/EU
Article 19a – paragraph 2 – subparagraph 1 – point a – point v

(v) how ~~the undertaking’s strategy has been implemented with regard to sus~~sustainability matters and related targets, in connection with principal risks, opportunities, and severe impacts, have been integrated into the undertakin~~ability matters~~g’s strategy;

Amendment 150 #

Proposal for a directive
Article 1 – paragraph 1 – point 3

Directive 2013/34/EU
Article 19a – paragraph 2 – subparagraph 1 – point b

~~(b) a description of the targets related to sustainability matters set by the undertaking and of the progress the undertaking has made towards achieving those targets;~~deleted

Amendment 151 #

Proposal for a directive
Article 1 – paragraph 1 – point 3

Directive 2013/34/EU
Article 19a – paragraph 2 – subparagraph 1 – point b

(b) a description of the ~~targets related to sustainability matters set by the undertaking~~science-based and time-bound short-term, mid-term and long-term targets set by the undertaking to address the principal risks, opportunities and impacts of its activities with regards to sustainability matters, along with corresponding evidence; (new) a description of the investments, actions and policies adopted to achieve those targets, and of the progress the undertaking has made towards achieving those targets;

Amendment 152 #

Proposal for a directive
Article 1 – paragraph 1 – point 3

Directive 2013/34/EU
Article 19a – paragraph 2 – subparagraph 1 – point c

~~(c) a description of the role of the administrative, management and supervisory bodies with regard to sustainability matters;~~deleted

Amendment 153 #

Proposal for a directive
Article 1 – paragraph 1 – point 3

Directive 2013/34/EU
Article 19a – paragraph 2 – subparagraph 1 – point b

(c) a description of the role of the administrative, management and supervisory bodies with regard to sustainability matters; , including with regard to: (i) the matters addressed by these bodies during the reporting period (ii) their engagement in 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; (ii) their engagement in the analysis of main risks and opportunities for the undertaking related to sustainability matters; (iii) approval of the undertaking’s strategy and targets related to sustainability matters and of financial resources for their implementation (iv) specific oversight on the implementation of the undertaking’s strategy related to sustainability matters; (v) expertise on sustainability matters possessed by the members of the administrative, management and supervisory bodies and consultation of external experts;

Amendment 154 #

Proposal for a directive
Article 1 – paragraph 1 – point 3

Directive 2013/34/EU
Article 19a – paragraph 2 – subparagraph 1 – point d

(d) a description of the undertaking’s policies in relation to sustainability matters and in particular with respect to identified actual or potential severe impacts and opportunities;

Amendment 155 #

Proposal for a directive
Article 1 – paragraph 1 – point 3

Directive 2013/34/EU
Article 19a – paragraph 2 – subparagraph 1 – point e

(e) a description of: (i) the due diligence process implemented with regard to sustainability matters; (ii) the principal actual or potential adverse impacts connected with the undertaking’s value chain, including its own operations, its products and services, its business relationships and its supply chain; (iii) any actions taken, and the result of such actions, to prevent, mitigate or remediate actual or potential adverse impacts;deleted

Amendment 156 #

Proposal for a directive
Article 1 – paragraph 1 – point 3

Directive 2013/34/EU
Article 19a – paragraph 2 – subparagraph 1 – point e – point i

~~(i) the due diligence process implemented with regard to sustainability matters;~~deleted

Amendment 157 #

Proposal for a directive
Article 1 – paragraph 1 – point 3

Directive 2013/34/EU
Article 19a – paragraph 2 – subparagraph 1 – point e – point i

(i) the due diligence process implemented with regard to sustainability matters; in line with applicable EU legislation on due diligence [Directive XXX]; (new) the structure of the undertaking’s value chain including through a mapping of its own operations, subsidiaries, suppliers and business relationships. Disclosed information should include names, locations, types of products and services supplied.

Amendment 158 #

Proposal for a directive
Article 1 – paragraph 1 – point 3

Directive 2013/34/EU
Article 19a – paragraph 2 – subparagraph 1 – point e – point i

(i) the due diligence process implemented with regard to sustainability matters, notably regarding human rights and environmental due diligence along the entire supply and value chain, including gender equality and workers’ rights as well as plans to eradicate child labour and forced labour;

Amendment 159 #

Proposal for a directive
Article 1 – paragraph 1 – point 3

Directive 2013/34/EU
Article 19a – paragraph 2 – subparagraph 1 – point e – point ii

(ii) the ~~principal~~ actual or potential adverse impacts connected with the undertaking’s value chain as identified through the due diligence process, including its own operations, its products and services, its subsidiaries, its business relationships and its supply chain, including information on people affected by those impacts; (new) the negative or positive effects of the undertaking’s business practices, policies and decisions on the identified impacts, including its purchasing policies and practices;

Amendment 160 #

Proposal for a directive
Article 1 – paragraph 1 – point 3

Directive 2013/34/EU
Article 19a – paragraph 2 – subparagraph 1 – point e – point ii

(ii) the ~~principal~~ actual or potential adverse impacts connected with the undertaking’s value chain, including its own operations, its products and services, its business relationships and ~~its~~the supply chain in high- impact sectors;

Amendment 161 #

Proposal for a directive
Article 1 – paragraph 1 – point 3

Directive 2013/34/EU
Article 19a – paragraph 2 – subparagraph 1 – point e – point iii

(iii) any actions taken, and the result of such actions, to ~~prevent, mitigate or~~identify, assess, prevent, mitigate, cease, monitor, communicate, account for, address and remediate actual or potential adverse impacts;

Amendment 162 #

Proposal for a directive
Article 1 – paragraph 1 – point 3

Directive 2013/34/EU
Article 19a – paragraph 2 – subparagraph 1 – point e – point iii a (new)

(iiia) any actions of reskilling and formation of the work force due to processes of restructuration to comply with sustainability standards in a just transition in order to leave no one behind;

Amendment 163 #

Proposal for a directive
Article 1 – paragraph 1 – point 3

Directive 2013/34/EU
Article 19a – paragraph 2 – subparagraph 1 – point g

~~(g) indicators relevant to the relevant to the disclosures referred to in points (a) to (f).~~deleted

Amendment 164 #

Proposal for a directive
Article 1 – paragraph 1 – point 3

Directive 2013/34/EU
Article 19 a – paragraph 2 – subparagraph 2

~~Undertakings shall also disclose information on intangibles, including information on intellectual, human, and social and relationship capital.~~deleted

Amendment 165 #

Proposal for a directive
Article 1 – paragraph 1 – point 3

Directive 2013/34/EU
Article 19a – paragraph 2 – subparagraph 2

~~Undertakings shall also disclose information on intangibles, including information on intellectual, human, and social and relationship capital.~~deleted

Amendment 166 #

Proposal for a directive
Article 1 – paragraph 1 – point 3

Directive 2013/34/EU
Article 19a – paragraph 3 – subparagraph 2

~~Where appropriate, t~~The information referred to in paragraphs 1 and 2 shall contain all information about the undertaking’s value chain, including the undertaking’s own operations, workforce, investments, assets, products and services, its business relationships and its supply chain that is useful in order to understand the impacts and risks related to sustainability matters for the undertaking.

Amendment 167 #

Proposal for a directive
Article 1 – paragraph 1 – point 3

Directive 2013/34/EU
Article 19a – paragraph 3 – subparagraph 2

~~Where appropriate, t~~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.

Amendment 168 #

Proposal for a directive
Article 1 – paragraph 1 – point 3

Directive 2013/34/EU
Article 19a – paragraph 3 – subparagraph 4

Member States may allow information relating to impending developments or matters in the course of negotiation to be omitted in exceptional cases where, in the duly justified opinion of the members of the administrative, management and supervisory bodies, acting within the competences assigned to them by national law and having collective responsibility for that opinion, the disclosure of such information would be seriously prejudicial to the commercial position of the undertaking, provided that such omission does not prevent a fair and balanced under standing of the undertaking's development, performance, position and impact of its activity.deleted

Amendment 169 #

Proposal for a directive
Article 1 – paragraph 1 – point 3

Directive 2013/34/EU
Article 19a – paragraph 3 – subparagraph 4

~~Member State~~Undertakings may ~~allow~~omit information relating to impending developments or matters in the course of negotiation to be omitted in exceptional cases where, in the duly justified opinion of the members of the administrative, management and supervisory bodies, acting within the competences assigned to them by national law and having collective responsibility for thatwhere, in their opinion, the disclosure of such information would be ~~seriously~~ prejudicial to the commercial position ~~of the undertaking, provided that such omission does not prevent a fair and balanced understanding of the undertaking's development, performance, position and impact of its activity~~.

Amendment 170 #

Proposal for a directive
Article 1 – paragraph 1 – point 3

Directive 2013/34/EU
Article 19a – paragraph 3 – subparagraph 4

Member States may allow limited information relating to impending devel-opments or matters in the course of negotiation to be omitted in exceptional cases where, in the duly justified opinion of the members of the administrative, management and supervisory bodies, acting within the competences assigned to them by national law and having collective responsibility for that opinion, the disclosure of such information would be seriously prejudicial to the commercial position of the undertaking, provided that such omission does not prevent a fair and balanced under standing of the undertaking's development, performance, position and impact of its activity.

Amendment 171 #

Proposal for a directive
Article 1 – paragraph 1 – point 3

Directive 2013/34/EU
Article 19a – paragraph 4

4. Undertakings shall report the information referred to in paragraphs 1 to 3 in accordance with the sustainability reporting standards referred to in Article 19b and annex the separate reports of any subsidiary undertaking broken down by country.

Amendment 172 #

Kira Marie PETER-HANSEN

Proposal for a directive
Article 1 – paragraph 1 – point 3

Directive 2013/34/EU
Article 19a – paragraph 5

5. By way of derogation from Article 19a, paragraphs 1 to 4, small and medium sized undertakings referred to in Article 2, point (1), point (a), may report in accordance with the sustainability reporting standards for small and medium sized undertakings referred to in Article 19c.deleted

Amendment 173 #

Proposal for a directive
Article 1 – paragraph 1 – point 3

Directive 2013/34/EU
Article 19a – paragraph 5

Amendment 174 #

Proposal for a directive
Article 1 – paragraph 1 – point 3

Directive 2013/34/EU
Article 19a – paragraph 5

(5) ~~By way of derogation from Article 19a, paragraphs 1 to 4, small and medium sized undertakings referred to in Article 2, point (1), point (a), may report in accordance with the~~Small and medium sized undertakings shall not be covered by the provisions on comprehensive mandatory sustainability reporting ~~standards for s~~of Article 19a. Small and medium sized undertakings ~~referred to in Article 19c~~may participate in voluntary sustainability reporting using a special system. This reporting shall be commensurate with their capacities and characteristics.

Amendment 175 #

Proposal for a directive
Article 1 – paragraph 1 – point 3

Directive 2013/34/EU
Article 19a – paragraph 7

~~[...]~~deleted

Amendment 176 #

Proposal for a directive
Article 1 – paragraph 1 – point 3

Directive 2013/34/EU
Article 19a – paragraph 7

~~[...]~~deleted

Amendment 177 #

Proposal for a directive
Article 1 – paragraph 1 – point 3

Directive 2013/34/EU
Article 19a – paragraph 7 – subparagraph 2

The consolidated management report of the parent undertaking referred to in subparagraph 1 shall be published in accordance with Article 30, in the manner prescribed by the law of the Member State by which the undertaking that is exempted from the obligations set out in paragraphs 1 to 4 is governed.deleted

Amendment 178 #

Proposal for a directive
Article 1 – paragraph 1 – point 3

Directive 2013/34/EU
Article 19a – paragraph 7 – subparagraph 2

Amendment 179 #

Proposal for a directive
Article 1 – paragraph 1 – point 3

Directive 2013/34/EU
Article 19a – paragraph 7 – subparagraph 3

The Member State by which the undertaking that is exempted from the obligations set out in paragraphs 1 to 4 is governed, may require that the consolidated management report referred to in the first subparagraph of this paragraph is published in an official language of the Member State or in a language customary in the sphere of international finance, and that any necessary translation into those languages is certified.deleted

Amendment 180 #

Proposal for a directive
Article 1 – paragraph 1 – point 3

Directive 2013/34/EU
Article 19a – paragraph 7 – subparagraph 3

The Member State ~~by which the undertaking that is exempted from the obligations set out~~governing a subsidiary of an undertaking referred to in paragraphs 1 ~~to 4 is governed,~~ may require that the consolidated management report ~~referred to in the first subparagraph of this paragraph~~of that parent undertaking is published in an official language of the Member State or in a language customary in the sphere of international finance, and that any necessary translation into those languages is certified.

Amendment 181 #

Proposal for a directive
Article 1 – paragraph 1 – point 3

Directive 2013/34/EU
Article 19a – paragraph 7 – subparagraph 3

The Member State by which the parent undertaking that is exempted from the obligations set out in paragraphs 1 to 4 is governed, may require that the consolidated management report referred to in in the first subparagraph of this paragraph is published in anits official language ~~of the Member State~~ or in a language customary in the sphere of international finance, and that any necessary translation into those languages is certified.

Amendment 182 #

Proposal for a directive
Article 1 – paragraph 1 – point 3

Directive 2013/34/EU
Article 19a – paragraph 7 – subparagraph 4

The management report of an undertaking that is exempted from the obligations set out in paragraphs 1 to 4 shall contain all of the following information: (a) the name and registered office of the parent undertaking that reports information at group level in accordance with Articles 29 and 29a, or in a manner that may be considered equivalent, in accordance with the implementing measures adopted pursuant to Article 23(4), point (i) of Directive 2004/109/EC, to the manner required by the sustainability reporting standards referred to in Article 19b; (b) the fact that the undertaking is exempted from the obligations set out in paragraphs 1 to 4 of this Article.deleted

Amendment 183 #

Proposal for a directive
Article 1 – paragraph 1 – point 3

Directive 2013/34/EU
Article 19a – paragraph 7 – subparagraph 4 – introductory part

The management report of a~~n undertaking that is exempted from~~ subsidiary of a parent undertaking subjected to the obligations set out in paragraphs 1 to 4 shall contain all of the following information:

Amendment 184 #

Proposal for a directive
Article 1 – paragraph 1 – point 3

Directive 2013/34/EU
Article 19a – paragraph 7 – subparagraph 4 – point b

~~(b) the fact that the undertaking is exempted from the obligations set out in paragraphs 1 to 4 of this Article.~~deleted

Amendment 185 #

Sylvie BRUNET, Dragoş PÎSLARU, Stéphane BIJOUX, Marie-Pierre VEDRENNE, Véronique TRILLET-LENOIR

Proposal for a directive
Article 1 – paragraph 1 – point 3

Directive 2013/34/EU
Article 19a – paragraph 7 a (new)

7a. 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. The European Commission shall guarantee the meaningful participation of stakeholders, including trade unions and civil society organisations, in the process of review and amendment of the lists. It shall guarantee that the process is.

Amendment 186 #

Proposal for a directive
Article 1 – paragraph 1 – point 3

Directive 2013/34/EU
Article 19 a – paragraph 7 a (new)

7a. The Commission shall be empowered to adopt delegated acts in accordance with Article 49 to establish and amend the list of high-risk sectors of economic activity set out in Article 2, point (20a). That list shall take into account the work of the Platform on Sustainable Finance established in accordance with Article 20 of Regulation (EU) 2020/852 and the OECD Due Diligence Guidance for Responsible Business Conduct, including for mining, extractive industries, agriculture, clothing and footwear, finance and international shipping. The list of sectors taken into account in this definition shall take account of correspondence with the NACE classification1a. _________________ 1a Statistical classification of economic activities in the European Union, NACE Rev. 2.

Amendment 187 #

Sylvie BRUNET, Dragoş PÎSLARU, Stéphane BIJOUX, Marie-Pierre VEDRENNE, Véronique TRILLET-LENOIR

Proposal for a directive
Article 1 – paragraph 1 – point 4

Directive 2013/34/EU
Article 19 b – paragraph 1

~~(1) The Commission shall adopt~~ delegated acts in accordance with Article 49 to provide for sustainability reporting standards. Those sustainability reporting standards shall specify the information that undertakings are to report in accordance with Articles 19a and 29a and, where relevant, shall specify the structure in which that information shall be reported. In particular: (a) by 31 October 2022, the Commission shall adopt delegated acts specifying the information that undertakings are to report in accordance with paragraphs 1 and 2 of Article 19a, and at least specifying information corresponding to the needs of financial market participants subject to the disclosure obligations of Regulation (EU) 2019/2088. (b) by 31 October 2023, the Commission shall adopt delegated acts specifying: (i) complementary information that undertakings shall report with regard to the sustainability matters and reporting areas listed in Article 19a(2), where necessary; (ii) information that undertakings shall report that is specific to the sector in which they operate. 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), and where necessary shall amend such delegated act to take into account relevant developments, including developments with regard to international standards.

Amendment 188 #

Proposal for a directive
Article 1 – paragraph 1 – point 4

Directive 2013/34/EU
Article 19b – paragraph 1 – subparagraph 1 – point b – point i

(i) complementary information that undertakings shall report with regard to the sustainability matters and ~~reporting areas listed in Article 19a(2), where necessary~~whether this information should relate to the company's direct operations and activities or those of its value and supply chain and reporting areas listed in Article 19a(2), where necessary. The level of detail regarding impacts within the value chain should be specified and may differ between economic activities. The reporting obligations within the value and supply chain should therefore be adapted to each economic activity and based on a risk analysis of potential impacts. The Commission's delegated acts should provide the criteria for establishing this risk analysis ;

Amendment 189 #

Sylvie BRUNET, Dragoş PÎSLARU, Stéphane BIJOUX, Marie-Pierre VEDRENNE, Véronique TRILLET-LENOIR

Proposal for a directive
Article 1 – paragraph 1 – point 4

Directive 2013/34/EU
Article 19b – paragraph 1 – subparagraph 1 – point b – point ii a (new)

(iia) the criteria and implementing rules for sustainability reporting for medium-sized undertakings referred to in Article 19a(1);

Amendment 190 #

Proposal for a directive
Article 1 – paragraph 1 – point 4

Directive 2013/34/EU
Article 19b – paragraph 1 – subparagraph 1 – point b – point ii a (new)

(iia) information which sectors are considered high-risk.

Amendment 191 #

Sylvie BRUNET, Dragoş PÎSLARU, Stéphane BIJOUX, Marie-Pierre VEDRENNE, Véronique TRILLET-LENOIR

Proposal for a directive
Article 1 – paragraph 1 – point 4

Directive 2013/34/EU
Article 19 b – paragraph 1 – subparagraph 1 – point b – point ii b (new)

(iib) the criteria and implementing rules for sustainability reporting for undertakings referred to in Article 3(7), which are governed by the law of a third country and are not established in the territory of the Union when they operate in the internal market selling goods or providing services.

Amendment 192 #

Radan KANEV, Dennis RADTKE, Miriam LEXMANN, Krzysztof HETMAN

Proposal for a directive
Article 1 – paragraph 1 – point 4

Directive 2013/34/EU
Article 19b – paragraph 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 sustainability reporting standards shall, taking into account the subject matter of a particular standard: (a) specify the information that undertakings are to disclose about environmental factors, including information about: (i) climate change mitigation; (ii) climate change adaptation; (iii) water and marine resources; (iv) resource use and circular economy; (v) pollution; (vi) biodiversity and ecosystems; (b) specify the information that undertakings are to disclose about social factors, including information about: (i) equal opportunities for all, including gender equality and equal pay for equal work, training and skills development, and employment and inclusion of people with disabilities; (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; (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. (c) specify the information that undertakings are to disclose about governance factors, including information about: (i) the role of the undertaking’s administrative, management and supervisory bodies, including with regard to sustainability matters, and their composition; (ii) business ethics and corporate culture, including anti-corruption and anti- bribery; (iii) political engagements of the undertaking, including its lobbying activities; (iv) the management and quality of relationships with business partners, including payment practices; (v) the undertaking’s internal control and risk management systems, including in relation to the undertaking’s reporting process.deleted

Amendment 193 #

Proposal for a directive
Article 1 – paragraph 1 – point 4

Directive 2013/34/EU
Article 19b – paragraph 2 – subparagraph 1

2. The sustainability reporting standards referred to in paragraph 1 shall require that the information to be reported is understandable, accessible in particular for persons with disabilities relevant, representative, verifiable, comparable, and is represented in a faithful manner.

Amendment 194 #

Jessica POLFJÄRD, Sara SKYTTEDAL

Proposal for a directive
Article 1 – paragraph 1 – point 4

Directive 2013/34/EU
Article 19b – paragraph 2 – subparagraph 1

2. The sustainability reporting standards referred to in paragraph 1 shall require that the information to be reported is understandable, accessible to persons with disabilities, relevant, representative, verifiable, comparable, and is represented in a faithful manner.

Amendment 195 #

Proposal for a directive
Article 1 – paragraph 1 – point 4

Directive 2013/34/EU
Article 19b – paragraph 2 – subparagraph 1

2. The sustainability reporting standards referred to in paragraph 1 shall require that the information to be reported is understandable, accessible, relevant, representative, verifiable, comparable, and is represented in a faithful manner.

Amendment 196 #

Proposal for a directive
Article 1 – paragraph 1 – point 4

Directive 2013/34/EU
Article 19b – paragraph 2 – subparagraph 2 – point b – introductory part

(b) specify the information that undertakings are to disclose about social factors, ~~including~~limited to information about:

Amendment 197 #

Sylvie BRUNET, Dragoş PÎSLARU, Stéphane BIJOUX, Marie-Pierre VEDRENNE, Atidzhe ALIEVA-VELI, Véronique TRILLET-LENOIR

Proposal for a directive
Article 1 – paragraph 1 – point 4

Directive 2013/34/EU
Article 19b – paragraph 2 – subparagraph 2 – point b – point i

(i) equal opportunities for all, including gender equality and equal pay for equal work, training and skills development, and employment and inclusion of people with disabilities;. With regards to the inclusion of a disability perspective, reporting should cover, inter alia, all management areas of the undertaking, data on employment, information on the accessibility measures that have been taken to give response to the different types of disabilities identified, employee satisfaction surveys to measure the relative satisfaction of employees with disabilities compared to those without, and awareness-raising campaigns.

Amendment 198 #

Proposal for a directive
Article 1 – paragraph 1 – point 4

Directive 2013/34/EU
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 work, training and skills development~~work of equal value, diversity, pay transparency, measures against violence and harassment, training and skills development, in particular the rate of workers participating in training, and employment and inclusion of people with disabilities, in particular the rate of disabled workers;

Amendment 199 #

Proposal for a directive
Article 1 – paragraph 1 – point 4

Directive 2013/34/EU
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 work~~work, measures for just transition in the vulnerable regions and sectors, including, but not limited to measures under the Just Transition Mechanism, training and skills development, and employment and inclusion of people with disabilities;

Amendment 200 #

Proposal for a directive
Article 1 – paragraph 1 – point 4

Amendments to Directive 2013/34/EU
Article 19b – paragraph 2 – subparagraph 2 – point b – point i

(i) equal opportunities for all, including gender equality and equal pay for equal work~~, training and skills development~~ or work of equal value as well as pay transparency, training and skills development broken down by hours, gender and category of workers, and employment and inclusion of people with disabilities;

Amendment 201 #

Proposal for a directive
Article 1 – paragraph 1 – point 4

Directive 2013/34/EU
Article 19b – paragraph 2 – subparagraph 2 – point b – point i

(i) equal opportunities for all, including gender equality and equal pay for equal work, training and skills development, and the average expenditure on training per worker and employment and inclusion of people with disabilities; on a country-by-country base;

Amendment 202 #

Radan KANEV, Dennis RADTKE, Krzysztof HETMAN

Proposal for a directive
Article 1 – paragraph 1 – point 4

Directive 2013/34/EU
Article 19b – paragraph 2 – subparagraph 2 – point b – point i

(i) equal opportunities for all, including ~~gender equality~~non-discrimination on grounds of sex and equal pay for equal work, training and skills development, and employment and inclusion of people with disabilities;

Amendment 203 #

Proposal for a directive
Article 1 – paragraph 1 – point 4

Directive 2013/34/EU
Article 19b – paragraph 2 – subparagraph 2 – point b – point i a (new)

(ia) diversity in all levels of management, in particular women on boards, and the workforce broken down by gender, age, ethnicity and possible other relevant factors;

Amendment 204 #

Proposal for a directive
Article 1 – paragraph 1 – point 4

Directive 2013/34/EU
Article 19b – paragraph 2 – subparagraph 2 – point b – point i a (new)

(ia) the recognition of trade unions, existence of collective agreements and the coverage of workers therein;

Amendment 205 #

Proposal for a directive
Article 1 – paragraph 1 – point 4

Directive 2013/34/EU
Article 19b – paragraph 2 – subparagraph 2 – point b – point ii

(ii) ~~working conditions, including secure and adaptable employment, wages, social dialogue, collective bargaining~~undertaking’s workforce, on a country-by-country basis: (1) workforce composition and diversity with respect to gender equality and gender wage gap, vulnerable groups, and use of contingent labour including programmes and steps taken to reduce inequalities; (2) freedom of association, collective bargaining coverage, representation by trade unions and works councils and board-level employee representation where applicable; (3) wage levels disaggregated per gender, quartiles, workers categories and comparison with applicable minimum wage levels, risk at poverty wage level and living wages and the CEO-median worker pay gap; (4) working conditions, including secure employment, wages, working time, social dialogue, collective bargaining, respect for trade union rights and workers’ right to be informed and consulted, where applicable respect for the right of workers to elect worker board level representation, work-life balance and development of training and the average expenditures per worker and a healthy safe and well adapted work environment as protected in accordance with international, European, national instruments, agreements and by national labour law on a country-by- country base; (5) social dialogue and information and consultation arrangements established in accordance with the EU acquis in particular Directive2002/14/EC and, where applicable for Community-scale undertakings or Community-scale groups of undertakings, in accordance with Directive2009/38/EC, European Companies in accordance with Directive 2001/86/EC and European Cooperative Societies in accordance with Directive 2003/72/EC, as well as board-level employee representation where applicable. (6) occupational health and safety; (7) 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 or potential adverse impacts on sustainability matters; (8) implementation and results of the undertaking’s due diligence process to meet its responsibility to respect human rights, understood as those human rights established in the International Bill of Human Rights and othe ~~involvement of workers, work-life balance, and a healthy, safe and well- adapted work environment;~~ r 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; (9) workers in the value chain, including sector -specific data on workers in the value chains associated with high likelihood of actual or potential adverse impacts, corresponding to the data concerning the undertaking’s workforce information on impacts on human rights, including forced labour, child labour, privacy, freedom of expression and association, access to clean water and sanitation, and adequate housing -information on protection of labour costs, payment times and cancellations in purchasing policies and practices; (10) affected communities, including information on - human rights impact assessments carried out by the undertaking - respect for indigenous peoples’ rights and implementation of the undertaking’s policy on Free Prior and Informed Consent - health, safety and security of person - freedom of assembly and freedom of expression - human rights impacts related to land and access to water - economic impacts on communities; (11) consumers and end users, including information on - privacy and freedom of expression - health, safety and security of person - impacts related to marketing and advertising; In accordance with the EU labour law acquis and national law and practice, the central management shall consult with the appropriate worker representative bodies 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. Furthermore, they are to be consulted on in the identification of risks and impacts of the company on the environment and people. The appropriate worker representative bodies are also to be consulted 30 days prior to the submission of the sustainability report to the auditor. Employee representatives are to be provided with the resources, including the support of an expert, necessary to enable them to exercise the rights arising from this Directive in an appropriate manner. 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 2001/86/EC 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 Directive2002/14/EC. Where the administrative or management body of the company receives an opinion on the sustainability report in good time 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. This directive shall not affect higher reporting standards already reached on national level.

Amendment 206 #

Sylvie BRUNET, Dragoş PÎSLARU, Stéphane BIJOUX, Marie-Pierre VEDRENNE, Atidzhe ALIEVA-VELI, Véronique TRILLET-LENOIR

Proposal for a directive
Article 1 – paragraph 1 – point 4

Directive 2013/34/EU
Article 19b – paragraph 2 – subparagraph 2 – point b – point ii

(ii) working conditions, including secure and adaptable employment, ~~wages, social dialogue~~including adaptation to social and climate factors and to market disturbances, caused by green transition policies, availability of just transition policies in the vulnerable regions and sectors, adequacy of wages, social dialogue, freedom of association, collective bargaining and the involvement of workers, work-life balance, and a healthy, and safety, and ~~well-~~just transition measures adaopted ~~work environment~~through social dialogue;

Amendment 207 #

Proposal for a directive
Article 1 – paragraph 1 – point 4

Directive 2013/34/EU
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~~employment, adequacy of wages in allowing workers a decent standard of living, social dialogue, freedom of association, collective bargaining and the information, consultation and participation rights of workers, work-life balance, and a healthy, and safe ~~and well- adapted work envir~~ty, the rate of workers who have been injured at work, and just transition me~~nt;~~ asures adopted through social dialogue;

Amendment 208 #

Proposal for a directive
Article 1 – paragraph 1 – point 4

Directive 2013/34/EU
Article 19b – paragraph 2 – subparagraph 2 – point b – point ii

(ii) working conditions, including secure ~~and adaptable~~ employment, decent wages, social dialogue, collective bargaining ~~and the involvement of workers, work-life balance~~, freedom of association and the consultation, information and involvement of workers, work-life balance, maternity, paternity and parental leave, workers’ fluctuation broken down by age, gender, region, and a healthy, safe and well- adapted work environment;

Amendment 209 #

Jessica POLFJÄRD, Sara SKYTTEDAL

Proposal for a directive
Article 1 – paragraph 1 – point 4

Directive 2013/34/EU
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 the respect of safety and a health~~y, safe and well- adapted work environment~~ of employees and workers standards established by Council Directive 89/391/EEC;

Amendment 210 #

Proposal for a directive
Article 1 – paragraph 1 – point 4

Directive 2013/34/EU
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 the respect of safety and a health~~y, safe and well- adapted work environment;~~ of employees and workers standards established in the Directive 89/391/EEC

Amendment 211 #

Evelyn REGNER, Gabriele BISCHOFF

Proposal for a directive
Article 1 – paragraph 1 – point 4

Directive 2013/34/EU
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, including social counselling;

Amendment 212 #

Proposal for a directive
Article 1 – paragraph 1 – point 4

Directive 2013/34/EU
Article 19b – paragraph 2 – subparagraph 2 – point b – point ii

(iia) recognition of trade unions, collective bargaining coverage and the inclusion of workers on boards;

Amendment 213 #

Proposal for a directive
Article 1 – paragraph 1 – point 4

Directive 2013/34/EU
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.~~ governance conventions and the ILO´s Tripartite Declaration of Principles concerning Multinational Enterprises and Social Policy the European Convention of Human Rights, the European Social Charter (revised), the OECD Guidelines for Multinational Enterprises and the Charter of Fundamental Rights of the European Union and the EU labour law acquis, including the right for workers to be informed and consulted by management prior to the making of final decisions on matters of significance importance to the workforce;

Amendment 214 #

Proposal for a directive
Article 1 – paragraph 1 – point 4

Directive 2013/34/EU
Article 19b – paragraph 2 – subparagraph 2 – point b – point iii

(iii) respect for the human rights, fundamental freedoms, democratic principles and, provided that they are binding following ratification by the relevant Member State, 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.

Amendment 215 #

Proposal for a directive
Article 1 – paragraph 1 – point 4 Directive 2013/34/EU

(iii) ~~respect for the~~due diligence processes for ensuring human rights, fundamental freedoms, democratic principles and standards established in the International Bill of Human Rights and other core UN human rights conventions, the UN Guiding Principles on Business and Human Rights, 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.

Amendment 216 #

Proposal for a directive
Article 1 – paragraph 1 – point 4

Directive 2013/34/EU
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 such as the UN Convention on the Rights of Persons with Disabilities, 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.

Amendment 217 #

Proposal for a directive
Article 1 – paragraph 1 – point 4

Directive 2013/34/EU
Article 19b – paragraph 2 – subparagraph 2 – point b – point iii a (new)

(iiia) human rights impact assessments carried out by the relevant public authorities and adopted by the undertaking with respect violation of essential human rights and in particular against forced labour and child labour and the implementation of the undertaking's policy on free, prior and informed consent.

Amendment 218 #

Evelyn REGNER, Marc ANGEL, Gabriele BISCHOFF, Manuel PIZARRO, Vilija BLINKEVIČIŪTĖ

Proposal for a directive
Article 1 – paragraph 1 – point 4

Directive 2013/34/EU
Article 19b – paragraph 2 – subparagraph 2 – point c – point i

(i) the role of the undertaking’s administrative, management and supervisory bodies, including with regard to sustainability matters, and their composition and the presence of workers’ representatives, and their trade unions, with a focus on selection procedures, level of information and voting rights compare to other members of these bodies;

Amendment 219 #

Proposal for a directive
Article 1 – paragraph 1 – point 4

Directive 2013/34/EU
Article 19b – paragraph 2 – subparagraph 2 – point c – point i

(i) the role of the undertaking’s administrative, management and supervisory bodies, including with regard to sustainability matters, and their composition as regards especially diversity and the inclusion of workers;

Amendment 220 #

Proposal for a directive
Article 1 – paragraph 1 – point 4

Directive 2013/34/EU
Article 19b – paragraph 2 – subparagraph 2 – point c – point i

(i) the role of the undertaking’s administrative, management and supervisory bodies, including with regard to sustainability matters~~, and their composition~~;

Amendment 221 #

Proposal for a directive
Article 1 – paragraph 1 – point 4

Directive 2013/34/EU
Article 19b – paragraph 2 – subparagraph 2 – point c – point ii

(ii) business ethics and corporate culture, including anti-corruption and anti- bribery programmes, assessment of corruption risks, and whistleblowing procedures and results;

Amendment 222 #

Proposal for a directive
Article 1 – paragraph 1 – point 4

Directive 2013/34/EU
Article 19b – paragraph 2 – subparagraph 2 – point c – point ii

(ii) business ethics and corporate culture, including anti-corruption, anti- workplace violence, anti-harassment and anti- bribery;

Amendment 223 #

Proposal for a directive
Article 1 – paragraph 1 – point 4

Directive 2013/34/EU
Article 19b – paragraph 2 – subparagraph 2 – point c – point v a (new)

(va) the undertaking’s engagement with civil society and state actors on sustainability matters, especially just transition measures and the undertaking’s social purpose;

Amendment 224 #

Proposal for a directive
Article 1 – paragraph 1 – point 4

Directive 2013/34/EU
Article 19b – paragraph 2 – subparagraph 2 – point c a (new)

(ca) the undertaking's social purpose, where applicable.

Amendment 225 #

Proposal for a directive
Article 1 – paragraph 1 – point 4

Directive 2013/34/EU
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, while differentiating those standards that are binding from that work and those frameworks which are not;

Amendment 226 #

Proposal for a directive
Article 1 – paragraph 1 – point 4

(f) Commission Recommendation 2013/179/EU*12, taking into account the non-binding nature of that Recommendation;

Amendment 227 #

Proposal for a directive
Article 1 – paragraph 1 – point 4

Directive 2013/34/EU
Article 19 c

~~Article 19c~~deleted

Amendment 228 #

Proposal for a directive
Article 1 – paragraph 1 – point 4

Directive 2013/34/EU
Article 19c – paragraph 1

The Commission shall, by 31 October 2024 at the latest, adopt a delegated acts in accordance with Article 49 ~~to provide for sustainability reporting standards proportionate to the capacities and characteristics of~~listing for which sectors small and medium- sized- undertakings~~. Those sustainability reporting standards shall specify which information referred to in Articles 19a and 29a~~ are to report according to Articles 19a and 29a. The list of sectors shall list sectors according to the third level of NACE Rev, 2 as defined by Article 2(c) of Regulation (EC) No1893/2006. The delegated act smhall 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 reportedlist sectors that according to their nature or their overall impact on environmental, social or governance factors pose a particular impact unsustainability matters. When adopting that delegated act, the Commission shall take into consideration if mandatory reporting would particularly benefit the access to financial capital for the concerned small and medium sized- undertakings or if the disclosure of information would have a particular benefit for other stakeholders.

Amendment 229 #

Proposal for a directive
Article 1 – paragraph 1 – point 4

Directive 2013/34/EU
Article 19c – paragraph 1

The Commission, having consulted EFRAG, 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 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. EFRAG’s advisory opinion shall be made available to the European Parliament and the Council.

Amendment 230 #

Proposal for a directive
Article 1 – paragraph 1 – point 4

Directive 2013/34/EU
Article 19c – paragraph 2

The Commission shall adopt those delegated acts at the latest by 31 October 20234.

Amendment 231 #

Proposal for a directive
Article 1 – paragraph 1 – point 4

Directive 2013/34/EU
Article 19d – paragraph 1

1. Undertakings subject to Article 19a shall prepare their financial statements and their management report in a single electronic reporting format in accordance with Article 3 of Commission Delegated Regulation (EU) 2019/815*15, Directive 2019/882 and shall mark-up their sustainability reporting, including the disclosures laid down in Article 8 of Regulation (EU) 2020/852, in accordance with that Delegated Regulation.

Amendment 232 #

Proposal for a directive
Article 1 – paragraph 1 – point 4

Directive 2013/34/EU
Article 19d – paragraph 1 a (new)

1a. Electronic financial statements and reports shall draw inspiration from the relevant access requisites laid down in the Directive 2019/882 on the accessibility requirements for products and services in order to become accessible to wider audiences;

Amendment 233 #

Proposal for a directive
Article 1 – paragraph 1 – point 4

Directive 2013/34/EU
Article 19d – paragraph 2

2. Undertakings subject to Article 29a shall prepare their consolidated financial statements and their consolidated management report in a single electronic reporting format in accordance with Article 3 of Delegated Regulation (EU) 2019/815, Directive 2019/882 and shall mark-up sustainability reporting, including the disclosures laid down in Article 8 of Regulation (EU) 2020/852.

Amendment 234 #

Proposal for a directive
Article 1 – paragraph 1 – point 5 – point a

Directive 2013/34/EU
Article 20 – paragraph 1 – point g

(g) a description of the diversity and inclusion policy applied in relation to the undertaking's administrative, management and supervisory bodies with regard to gender equality, antidiscrimination, support for minority and vulnerable groups, including persons with disabilities, and other aspects such as, age, or educational and professional backgrounds, the objectives of that diversity policy, how it has been 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 235 #

Proposal for a directive
Article 1 – paragraph 1 – point 5 – point a

Directive 2013/34/EU
Article 20 – paragraph 1 – point g

(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, disabilities, or educational and professional backgrounds, the objectives of that diversity policy, how it has been 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 236 #

Proposal for a directive
Article 1 – paragraph 1 – point 5 – point a

Directive 2013/34/EU
Article 20 – paragraph 1 – point g

(g) a description of the ~~diversity~~non- discrimination policy applied in relation to the undertaking's administrative, management and supervisory bodies with regard to ~~gender~~sex and other aspects such as, age, or educational and professional backgrounds, the objectives of that ~~diversity~~non- discrimination policy, how it has been 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 237 #

Proposal for a directive
Article 1 – paragraph 1 – point 7

Directive 2013/34/EU
Article 29a – paragraph 1

1. Parent undertakings of a large group shall include in the consolidated management report information necessary to understand the group's impacts on sustainability matters, and information broken down by country necessary to understand how sustainability matters affect the group's development, performance and position.

Amendment 238 #

Proposal for a directive
Article 1 – paragraph 1 – point 7

Directive 2013/34/EU
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;~~deleted

Amendment 239 #

Proposal for a directive
Article 1 – paragraph 1 – point 7

Directive 2013/34/EU
Article 29a – paragraph 2 – subparagraph 1 – point a – point ii

(ii) the ~~opportunitie~~strengths, weaknesses, opportunities and threats for the group related to sustainability matters;

Amendment 240 #

Proposal for a directive
Article 1 – paragraph 1 – point 7

Directive 2013/34/EU
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 compatible with the just transition to a sustainable economy and with the limiting of global warming to 1.5 °C in line with the Paris Agreement;

Amendment 241 #

Proposal for a directive
Article 1 – paragraph 1 – point 7

Directive 2013/34/EU
Article 29a – paragraph 2 – subparagraph 1 – point a – point iii a (new)

(iiia) the objective of the undertaking to achieve diversity and gender equality, especially pay transparency, equal pay for work or work of equal value, equal opportunities and diversity in its management;

Amendment 242 #

Proposal for a directive
Article 1 – paragraph 1 – point 7

Directive 2013/34/EU
Article 29a – paragraph 2 – subparagraph 1 – point a – point iv

(iv) how the group’s business model and strategy ~~take account~~ensure decent work, fair wages, company training and further education of workers, information and consultation of workers and safeguard the rights of trade unions and of the interests of the group’s stakeholders and of the impacts of the group on sustainability matters along the entire supply and value chain;

Amendment 243 #

Sylvie BRUNET, Dragoş PÎSLARU, Stéphane BIJOUX, Marie-Pierre VEDRENNE, Atidzhe ALIEVA-VELI, Véronique TRILLET-LENOIR

Proposal for a directive
Article 1 – paragraph 1 – point 7

Directive 2013/34/EU
Article 29 a – paragraph 2 – subparagraph 1 – point e – point i

~~(i) the due diligence process implemented with regard to sustainability matters;~~deleted

Amendment 244 #

Proposal for a directive
Article 1 – paragraph 1 – point 7

Directive 2013/34/EU
Article 29a – paragraph 2 – subparagraph 1 – point e – point i

Amendment 245 #

Proposal for a directive
Article 1 – paragraph 1 – point 7

Directive 2013/34/EU
Article 29a – paragraph 2 – subparagraph 1 – point e – point iii a (new)

(iiia) any reskilling and formation of the workforce due to processes of restructuration to comply with sustainability standards;

Amendment 246 #

Proposal for a directive
Article 1 – paragraph 1 – point 7

Directive 2013/34/EU
Article 29a – paragraph 3 – subparagraph 4

Member States may allow information relating to impending developments or matters in the course of negotiation to be omitted in exceptional cases where, in the duly justified opinion of the members of the administrative, management and supervisory bodies, acting within the competences assigned to them by national law and having collective responsibility for that opinion, the disclosure of such information would be seriously prejudicial to the commercial position of the group, provided that such omission does not prevent a fair and balanced under standing of the group's development, performance, position and impact of its activity.deleted

Amendment 247 #

Proposal for a directive
Article 1 – paragraph 1 – point 7

Directive 2013/34/EU
Article 29a – paragraph 7

7. A parent undertaking which is also a subsidiary undertaking shall be exempted from the obligation set out in paragraphs 1 to 4 if that exempted parent undertaking and its subsidiaries are included in the consolidated management report of another undertaking, drawn up in accordance with Article 29 and this Article. A parent undertaking that is a subsidiary undertaking from a parent undertaking that is established in a third country shall also be exempted from the obligations set out in paragraphs 1 to 4 where that undertaking and its subsidiary undertakings are included in the consolidated management report of that parent undertaking and where the consolidated management report is drawn up in a manner that may be considered equivalent, in accordance with the relevant implementing measures adopted pursuant to Article 23(4)(i) of Directive 2004/109/EC, to the manner required by the sustainability reporting standards referred to in Article 19b of this Directive. The consolidated management report of the parent undertaking referred to in subparagraph 1 shall be published in accordance with Article 30, in the manner prescribed by the law of the Member State by which the parent undertaking that is exempted from the obligations set out in paragraphs 1 to 4 is governed. The Member State by which the parent undertaking that is exempted from the obligations set out in paragraphs 1 to 4 is governed may require that the consolidated management report referred to in in the first subparagraph of this paragraph is published in its official language or in a language customary in the sphere of international finance, and that any necessary translation into those languages is certified. The consolidated management report of a parent undertaking that is exempted from the obligations set out in paragraphs 1 to 4 shall contain all of the following information: (a) the name and registered office of the parent undertaking that reports information at group level in accordance with Articles 29 and this Article, or in a manner that may be considered equivalent, in accordance with the relevant implementing measures adopted pursuant to Article 23(4)(i) of Directive 2004/109/EC, to the manner required by the sustainability standards adopted pursuant to Article 19b; (b) the fact that the undertaking is exempted from the obligations set out in paragraphs 1 to 4 of this Article.;deleted

Amendment 248 #

Proposal for a directive
Article 1 – paragraph 1 – point 10 – point a – point ii

Directive 2013/34/EU
Article 34 – paragraph 1 – subparagraph 2 – point aa

(aa) where applicable, express an opinion based on a limited assurance engagement as regards the compliance of the sustainability reporting with the requirements and scope 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 249 #

Proposal for a directive
Article 1 – paragraph 1 – point 10 – point a – point ii

Directive 2013/34/EU
Article 34 – paragraph 1 – subparagraph 2 – point aa

(aa) where applicable, express an opinion based on a ~~limited~~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 250 #

Proposal for a directive
Article 1 – paragraph 1 – point 11 – point b

Directive 2013/34/EU
Article 49 – paragraph 3a

3a. When adopting delegated acts pursuant to Articles 19b and 19c, the Commission shall take into consideration technical advice from EFRAG, provided such advice has been developed with proper due process, public oversight and transparency and with the expertise of relevant stakeholders, notably social partners, consumer protection organisations and NGOs, and is accompanied by cost-benefit analyses that include analyses of the impacts of the technical advice on sustainability matters.

Amendment 251 #

Proposal for a directive
Article 1 – paragraph 1 – point 12

Directive 2013/34/EU
Article 51 – paragraph 2 – point a

~~(a) a public statement indicating the natural person or the legal entity responsible and the nature of the infringement;~~deleted

Amendment 252 #

Proposal for a directive
Article 2 – paragraph 1 – point 3

Directive 2004/109/EC
Article 23 – paragraph 4 – subparagraph 3

‘The Commission shall, in accordance with the procedure referred to in Article 27(2), take the necessary decisions on the equivalence of accounting standards and on the equivalence of sustainability reporting standards as referred to in Article 19b of Directive 2013/34/EU which are used by third-country issuers under the conditions set out in Article 30(3). If the Commission decides, having obtained an opinion from EFRAG, that the accounting standards or the sustainability reporting standards of a third country are not equivalent, it may allow the issuers concerned to continue using such accounting standards during an appropriate transitional period.

Amendment 253 #

Proposal for a directive
Article 2 – paragraph 1 – point 3

Directive 2004/109/EC
Article 23 – paragraph 4 – subparagraph 4

In the context of the third subparagraph, the Commission shall also adopt, by means of delegated acts adopted in accordance with paragraphs 2a, 2b and 2c of Article 27, and subject to the conditions laid down in Articles 27a and 27b, measures aimed at establishing general equivalence criteria regarding accounting standards and sustainability reporting standards relevant to issuers of more than one country, having obtained an opinion from EFRAG.’;

Amendment 254 #

Proposal for a directive
Article 2 – paragraph 1 – point 4

Directive 2004/109/EC
Article 28d – paragraph 1

After consulting the European Environment Agency and the European Union Agency for Fundamental Rights, the European Institute for Gender Equality and the social partners, ESMA shall issue guidelines in accordance with Article 16 of Regulation 1095/2010 on the supervision of sustainability reporting by national competent authorities.

Amendment 255 #

Proposal for a directive
Article 3 – paragraph 1 – point 7

Directive 2006/43/EC
Article 14 – paragraph 2 – subparagraph 3

The aptitude test shall be conducted in one of the official languages ~~permitted by the language rules applicable in the host Member State concerned~~of the European Union. It shall cover only the statutory auditor's adequate knowledge of the laws and regulations of that host Member State in so far as it is relevant to statutory audits and assurance engagements of sustainability reporting;

Amendment 256 #

Proposal for a directive
Article 3 – paragraph 1 – point 12

Directive 2006/43/EC
Article 26a – paragraph 2 – subparagraph 1

2. The Commission shall be empowered to adopt, by means of delegated acts in accordance with Article 48a and having obtained an opinion from EFRAG, the assurance standards referred to in paragraph 1 in order to set out the procedures that the auditor shall perform in order to draw its conclusions on the assurance of sustainability reporting, including engagement planning, risk consideration and response to risks and type of conclusions to be included in the audit report.

Amendment 257 #

Proposal for a directive
Article 3 – paragraph 1 – point 12

Directive 2006/43/EC
Article 26a – paragraph 3

3. Where the Commission adopts standards for reasonable assurance, the opinion referred to in Article 34(1), second subparagraph, point (aa) of Directive 2013/34/EU shall be based on a reasonable assurance engagement; however, in relation to undertakings with fewer than 50 workers the reasonable assurance engagement shall be optional.’;

Amendment 51 #

Proposal for a directive
Citation 5 a (new)

Rejects the proposal by the European Commission.

Amendment 52 #

Proposal for a directive
Recital 1

(1) In its communication on the European Green Deal adopted on 11 December 201930, the European Commission made a commitment to review the provisions concerning non- financial reporting of Directive 2013/34/EU of the European Parliament and of the Commission31. The European Green Deal is the European Union’s new growth strategy. It aims to transform the Union into a modern, resource-efficient and competitive economy with no net emissions of greenhouse gases by 2050. It also aims to protect, conserve and enhance the Union's natural capital, and protect the health and well-being of citizens from environment-related risks and impacts. The European Green Deal aims at decoupling economic growth from resource use, and ensuring that all regions and citizens of the Union participate in a socially just transition to a sustainable economic system. It will contribute to the objective of building an economy that works for the people, strengthening the EU’s social market economy, helping to ensure that it is future-ready and that it delivers stability, jobs, growth and investment. These goals are especially important considering the socio-economic damage caused by the COVID-19 pandemic and the need for a sustainable, inclusive and fair recovery. In its proposal of 4 March 2020 for a European Climate Law, the European Commission proposed to make the objective of climate neutrality by 2050 binding in the Union.32 _________________ 30 31 Directive 2013/34/EU of the European Parliament and of the Council of 26 June 2013 on the annual financial statements, consolidated financial statements and related reports of certain types of undertakings, amending Directive 2006/43/EC of the European Parliament and of the Council and repealing Council Directives 78/660/EEC and 83/349/EEC (OJ L 182, 29.6.2013, p. 19). 32 European Parliament and of the Council establishing the framework for achieving climate neutrality and amending Regulation (EU) 2018/1999 (European Climate Law) [2020/0036 (COD)]deleted COM(2019) 640 final. Proposal for a Regulation of the

Amendment 53 #

Proposal for a directive
Recital 1

(1) In its communication on the European Green Deal adopted on 11 December 201930 , the European Commission made a commitment to review the provisions concerning non-financial reporting of Directive 2013/34/EU of the European Parliament and of the Commission.31 The European Green Deal is the European Union’s new growth strategy. It aims to transform the Union into a modern, resource-efficient and competitive economy with no net emissions of greenhouse gases by 2050. It also aims to protect, conserve and enhance the Union's natural capital, and protect the health and well-being of citizens from environment-related risks and impacts. The European Green Deal aims at decoupling economic growth from resource use, and ensuring that all regions and citizens of the Union participate in a socially just transition to a sustainable economic system. It will contribute to the objective of building an economy that works for the people, strengthening the EU’s social market economy, helping to ensure that it is future-ready and that it delivers stability, quality jobs, growth and investment. These goals are especially important considering the socio-economic damage caused by the COVID-19 pandemic and the need for a sustainable, inclusive and fair recovery. In its proposal of 4 March 2020 for a European Climate Law, the European Commission proposed to make the objective of climate neutrality by 2050 binding in the Union.32 _________________ 30 COM(2019) 640 final. 31 Directive 2013/34/EU of the European Parliament and of the Council of 26 June 2013 on the annual financial statements, consolidated financial statements and related reports of certain types of undertakings, amending Directive 2006/43/EC of the European Parliament and of the Council and repealing Council Directives 78/660/EEC and 83/349/EEC (OJ L 182, 29.6.2013, p. 19). 32 Proposal for a Regulation of the European Parliament and of the Council establishing the framework for achieving climate neutrality and amending Regulation (EU) 2018/1999 (European Climate Law) [2020/0036 (COD)]

Amendment 54 #

Proposal for a directive
Recital 2 a (new)

(2a) Diversity on company boards contributes to better decision making, corporate governance and resilience in high-risk undertakings.1a Workers’ representatives as well as more women on boards would promote the sustainable development of undertakings. _________________ 1a COM(2020) Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions A Union of Equality: Gender Equality: Strategy2020-2025,5.3.2020

Amendment 55 #

Proposal for a directive
Recital 5

(5) On 25 September 2015, the UN General Assembly adopted a new global sustainable development framework: the 2030 Agenda for Sustainable Development (the ‘2030 Agenda’). The 2030 Agenda has at its core the Sustainable Development Goals and covers the three dimensions of sustainability: economic, social and environmental. The Commission communication of 22 November 2016 on the next steps for a sustainable European future linked the Sustainable Development Goals to the Union policy framework ~~to ensure that all Union actions and policy initiatives, both in and beyond the Union, take those goals on board at the outset45~~ 45, although since it is a communication it is not binding. In its conclusions of 20 June 2017, the Council confirmed the commitment of the Union and its Member States to the implementation of the 2030 Agenda in a full, coherent, comprehensive, integrated and effective manner, in close cooperation with partners and other stakeholders46. _________________ 45 COM(2016) 739 final 46 the Council conclusions ‘A sustainable European future: The EU response to the 2030 Agenda for Sustainable Development’ 20 June 2017.

Amendment 56 #

Proposal for a directive
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 those large 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 relevant to the business. _________________ 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 57 #

Proposal for a directive
Recital 7

(7) Many stakeholders consider the term ‘non-financial’ to be inaccurate, in particular because it implies that the information in question has no financial relevance. Increasingly, however, the information in question does have financial relevance. Many organisations, initiatives and practitioners in this field refer to ‘sustainability’ information. It is therefore preferable to use the term ‘sustainability information’ in place of ‘non-financial information’. Directive 2013/34/EU should therefore be amended to take account of this change in terminology and to align sustainability reporting standards with financial reporting standards.

Amendment 58 #

Proposal for a directive
Recital 8

(8) The ultimate beneficiaries of better sustainability reporting by undertakings are ~~individual citizens and savers~~public authorities, trade union, workers and their representatives, individual citizens and savers. Policy makers and public authorities need this information in order to design and implement public policies, and in particular to protect people's rights and the environment, to hold undertakings accountable for their impacts and to conduct a just social and environmental transition. Trade unions, workers and their representatives need this information in order to be adequately informed about their company's activities and to be able to better engage in social dialogue. Savers who want to invest sustainably will 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 twohree primary groups (‘users’). The first group of users consists of policy makers and public authorities. The second 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 ~~secon~~third group of users consists of organisations, 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. 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 value chains. Policy makers and environmental agencies may also use such information, in particular on an aggregate basis, to monitor environmental and social 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. Many investors and asset managers purchase sustainability information from third party data providers, who collect information from various sources, including public corporate reports.

Amendment 59 #

Proposal for a directive
Recital 8

(8) The ultimate beneficiaries of better sustainability reporting by undertakings are individual citizens and savers. Savers who want to invest sustainably will have the opportunity to do so, while all citizens should benefit from a stable, sustainable, transparent 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 reputation and investments and the impacts of those investments on people, in particular workers and local communities, and the environment. The second group of users consists of organisations, including non- governmental organisations and social partners, that wish to better hold undertakings to account for their impacts on people, in particular workers and local communities, and the environment. Other stakeholders may also make use of sustainability information disclosed in annual reports. 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 value chains. Policy makers ~~and~~, social partners, environmental agencies and non-governmental organisations may use such information, in particular on an aggregate basis, to monitor environmental and social trends, to contribute to environmental accounts and social progress, 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. Many investors and asset managers purchase sustainability information from third party data providers, who collect information from various sources, including public corporate reports.

Amendment 60 #

Proposal for a directive
Recital 8

(8) The ultimate beneficiaries of better sustainability reporting by undertakings are individual citizens and savers. It is vital for this benefit to be compatible with the freedom of enterprise and the good of the economy in general. Savers who want to invest sustainably will 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 organisations, 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. 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 value chains. Policy makers and environmental agencies may use such information, in particular on an aggregate basis, to monitor environmental and social 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. Many investors and asset managers purchase sustainability information from third party data providers, who collect information from various sources, including public corporate reports.

Amendment 61 #

Proposal for a directive
Recital 8 a (new)

(8a) The reporting by undertaking, should, however, following the principle of proportionality, not cause an excessive burden on companies or require efforts non-proportionate to the size of the company, its staff and/or scope of business activities, thus putting into danger the employment and/or incomes of management and personnel, engaged in the usual business activities, by imposing new structures, job titles and management positions to the company staff.

Amendment 62 #

Proposal for a directive
Recital 8 b (new)

(8b) There should, furthermore, be no double reporting required and this Directive shall not be interpreted as requiring any reporting, already mandatory under another European or national legislative act, whereas certain adaptation of national legislation might be necessary in order to avoid double reporting

Amendment 63 #

Proposal for a directive
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~~EU institutions. 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. Awareness of the risks to undertakings and to investments resulting from other environmental 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 investment products that explicitly seek to meet certain sustainability standards or achieve certain sustainability objectives. Part of that increasan ideological requirement that handicaps undertakings in their freedom of manoeuvre and corporate vis 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 exposion, jeopardising their economic activities. The COVID-19 pandemic has accelerated the vulnerabilit~~ies~~y 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 64 #

Proposal for a directive
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. That increase in demand is driven by the changing nature of risks to undertakings and growing investor awareness of the financial and reputational implications of these risks. That is especially the case for climate- related financial risks. Awareness of the risks to undertakings and to investments resulting from other environmental issues and from social issues, including child and forced labour, discrimination and health issues, is also growing. The increase in demand for sustainability information is also driven by the growth in investment products that explicitly seek to meet certain sustainability standards or achieve certain sustainability objectives. 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~~, particularly women and informal workers, and of undertaking’s due diligence along the 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 10

(10) ~~Undertakings themselve~~Some large undertakings stand to benefit from carrying out high quality reporting on sustainability matters, as do the undertakings that help them to produce the reports. The growth in the number of investment products that aim to pursue sustainability objectives means that good sustainability reporting can enhance an undertaking’s access to financial capital. Sustainability reporting can help undertakings to identify and manage their own risks and opportunities related to sustainability matters. It can provide a basis for better dialogue and communication between under, by providing a response to the ideological conditionality to which they are subject. Sustakin~~gs and their stakeholders, and~~ability reporting can help undertakings to improve their reputation.

Amendment 66 #

Proposal for a directive
Recital 10 a (new)

(10a) Reporting could, however, not disclose any and all information on sustainability issues, either required by investors or expected by the public. Therefore, this Directive should by no means be interpreted as relieving public authorities of their duties or market players and social partners of their professional responsibilities.

Amendment 67 #

Proposal for a directive
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. 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 informationis should be the subject of a compliance review of that Directive. _________________ 48 Publications 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 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. The report also identified as significant problems the limited comparability and reliability of sustainability information. ~~Additionally, many undertakings from which users need su~~Therefore, this Directive aims mainly at proper reinforcement of the existain~~ability information~~ g rules for large ~~not obliged to report such~~and listed companies and the harmonization of the sustainability information required. _________________ 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 69 #

Proposal for a directive
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. 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. 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.deleted

Amendment 70 #

Proposal for a directive
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. 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. 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 and for trade unions to engage in sustainability matters.

Amendment 71 #

Proposal for a directive
Recital 13

(13) The report on the review clause of Directive 2014/95/EU, and its accompanying fitness check on corporate reporting, also recognised a significant increase in information requests for information about sustainability matters to undertakings in an attempt to address the existing information gap. In addition, ongoing expectations on undertakings to use a variety of different frameworks and standards are likely to continue and may even intensify as the value placed on sustainability information continues to grow. In the absence of policy action to build consensus on the information that undertakings should report, there will be significant increases in costs and burden for reporting undertakings and for users of such information.deleted

Amendment 72 #

Proposal for a directive
Recital 14

(14) The growing gap between users’ information needs and the current reporting practices of undertakings makes it more likely that individual Member States will introduce increasingly divergent national rules or standards. Different reporting requirements in different Member States would create additional costs and complexity for undertakings operating across borders and therefore undermine the single market, and would undermine the right of establishment and the free movement of capital across the Union. Those different reporting requirements also make reported information less comparable across borders, undermining the capital markets union.deleted

Amendment 73 #

Proposal for a directive
Recital 15

(15) Articles 19a and 29a of Directive 2013/34/EU should continue to 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 74 #

Proposal for a directive
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~~but not including, in any event, small or medium-sized undertakings or 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 75 #

Proposal for a directive
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 based on individual reports by subsidiary undertakings.

Amendment 76 #

Proposal for a directive
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 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.deleted

Amendment 77 #

Sylvie BRUNET, Dragoş PÎSLARU, Stéphane BIJOUX, Marie-Pierre VEDRENNE, Véronique TRILLET-LENOIR

Proposal for a directive
Recital 16

(16) The requirement that also large non-listed ~~undertaking~~, but potentially harmful undertakings from high-impact sectors should disclose information on sustainability matters is mainly driven by concerns about the impacts and accountability of such undertakings~~, including through their value chain. In this respect, all large undertaking~~. In this respect, all large and potentially harmful undertakings from high-impact sectors 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 78 #

Proposal for a directive
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 to ensure a level playing field. In addition, financial market participants also need information from ~~those large~~ non-listed undertakings.

Amendment 79 #

Proposal for a directive
Recital 17 a (new)

(17a) Account should be taken of the specific situation of undertakings which, although not having any legal establishment in the Union, regularly carry out a significant economic activity in it. Such undertakings should be subject to the same obligations as those established in the territory of the Union.

Amendment 80 #

Proposal for a directive
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 protection it is appropriate to require that also those SMEs disclose information on sustainability matters. 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. 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 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 value chainsSMEs should be exempted from additional requirements, and the obligation to disclose sustainability information should apply only to large undertakings having an average number of employees in excess of 500.

Amendment 81 #

Proposal for a directive
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 protection it is appropriate to require that also those SMEs disclose limited information on sustainability matters. 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. 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 limited sustainability information, due to their smaller size, limited scope of activities 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 standards on a strictly 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 value chains~~s. No public authority or publicly regulated entity whatsoever shall require or consider beneficial voluntary sustainability reporting from a non-listed SME, including, but not limited to, as precondition for participation in public procurements, tenders etc.

Amendment 82 #

Proposal for a directive
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 protection~~ with SME enterprises making up 99 per cent of all enterprises in the EU2a, in order to ensure investor protection as well as due diligence with regard to the environment and human rights it is appropriate to require that also ~~those~~ SMEs disclose information on sustainability matters. 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 will ensure a level playing field. 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 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. _________________ 2a https://ec.europa.eu/growth/smes_en

Amendment 83 #

Sylvie BRUNET, Dragoş PÎSLARU, Stéphane BIJOUX, Marie-Pierre VEDRENNE, Véronique TRILLET-LENOIR

Proposal for a directive
Recital 18

Amendment 84 #

Proposal for a directive
Recital 18 a (new)

(18a) Certain sectors of economic activity are recognised as posing particularly significant sustainability risks. In order to ensure that this Directive can also apply to such high-risk sectors of economic activity they should be defined and the power to adopt a delegated act in accordance with Article 290 of the Treaty on the Functioning of the European Union in respect of establishing a list of high-risk sectors of economic activity should be delegated to the Commission. It is of particular importance that the Commission carry out appropriate consultations during its preparatory work, including at expert level, and that those consultations be conducted in accordance with the principles laid down in the Interinstitutional Agreement of13 April 2016 on Better Law-Making1a. In particular, to ensure their equal participation in the preparation of delegated acts, Parliament and the Council should receive all documents at the same time as Member States’ experts, and their experts should systematically have access to meetings of Commission expert groups dealing with the preparation of delegated acts. Medium- sized undertakings carrying out a high- risk economic activity should also be subject to sustainability reporting obligations. _________________ 1a OJ L 123, 12.5.2016, p. 1.

Amendment 85 #

Proposal for a directive
Recital 20

(20) Article 23(4), first subparagraph, point (i), and Article 23(4), fourth subparagraph of Directive 2004/109/EC empower the Commission to adopt measures to set up a mechanism for the determination of equivalence of information required under the Directive, and for the establishment of general equivalence criteria regarding accounting standards, respectively. Article 23(4), third subparagraph, of Directive 2004/109/EC also empowers the Commission to take the necessary decisions on the equivalence of accounting standards that are used by third- country issuers. In order to reflect the inclusion of the sustainability requirements in Directive 2004/109/EC, the Commission should be empowered to establish a mechanism for the determination of equivalence of sustainability reporting standards applied by third-country issuers of securities. For the same reason, the Commission should also be empowered to take the necessary decisions on the equivalence of sustainability reporting standards that are used by third-country issuers. Those amendments will ensure consistent equivalence regimes for sustainability reporting obligations and for financial reporting obligations regarding the annual financial report. The Commission’s powers must in any event not encroach upon the competences of Member States.

Amendment 86 #

Proposal for a directive
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~~for the whole undertaking and its subsidiaries. In this regard, the refpore 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 standards.ts made by subsidiary undertakings should be added to the undertakings’ own report to generate an aggregate, public overview country-by- country similar to the transparency requirements set out in the public- Country-by-Country Directive1a. _________________ 1a Directive(EU) 2021/2101 of the European Parliament and of the Council of 24 November 2021amending Directive 2013/34/EU as regards disclosure of income tax information by certain undertakings and branches

Amendment 87 #

Proposal for a directive
Recital 23

(23) Credit institutions and insurance undertakings play a key role in the transition towards a fully sustainable and inclusive economic and financial system in line with the European Green Deal. They can have significant positive and negative impacts via their lending, investment and underwriting activities. Credit institutions and insurance undertakings other than those that are required to comply with Directive 2013/34/EU, including cooperatives and mutual undertakings, should therefore be subject to sustainability reporting requirements ~~provided that they meet certain size criteria~~. Users of that information would thus be enabled to assess both the impacts of these undertakings on society and the environment and the risks arising from sustainability matters that these undertakings could face. To ensure coherence with the reporting requirements of Council Directive 86/635/EEC50 on the annual accounts and consolidated accounts of banks and other financial institutions, sustainability reporting Member States may choose not to apply sustainability reporting requirements to credit institutions listed in Article 2(5) of Directive 2013/36/EU of the European Parliament and of the Council51 . _________________ 50 Council Directive 86/635/EEC of 8 December 1986 on the annual accounts and consolidated accounts of banks and other financial institutions (OJ L 372, 31.12.1986, p. 1). 51 Directive 2013/36/EU of the European Parliament and of the Council of 26 June 2013 on access to the activity of credit institutions and the prudential supervision of credit institutions and investment firms, amending Directive 2002/87/EC and repealing Directives 2006/48/EC and 2006/49/EC (OJ L 176, 27.6.2013, p. 338).

Amendment 88 #

Proposal for a directive
Recital 24

(24) The list of sustainability matters on which undertakings are required to report should be as coherent as possible with the definition of ‘sustainability factors’ laid down in Regulation (EU) 2019/2088 and the existing standards of the international Global Reporting Initiative (GRI). That list should also correspond to the needs and expectations of users and undertakings themselves, who often use the terms ‘environmental’, ‘social’ and ‘governance’ as a means to categorise the three main sustainability matters. The list of sustainability factors laid down in Regulation (EU) 2019/2088 does not explicitly include governance matters. The definition of sustainability matters in Directive 2013/34/EU should therefore be based on the definition of ‘sustainability factors’ laid down in Regulation (EU) 2019/2088, but with the addition of governance matters. The list is a minimum requirement, which will not lower existing national reporting requirements.

Amendment 89 #

Proposal for a directive
Recital 24

(24) The list of sustainability matters on which undertakings are required to report should be as coherent as possible with the definition of ‘sustainability factors’ laid down in Regulation (EU) 2019/2088. That list should also correspond to the needs and expectations of financial sector users and undertakings themselves, who often use the terms ‘environmental’, ‘social’ and ‘governance’ as a means to categorise the three main sustainability matters in that sector. The list of sustainability factors laid down in Regulation (EU) 2019/2088 does not explicitly include governance matters. The definition of sustainability matters in Directive 2013/34/EU should therefore be based on the definition of ‘sustainability factors’ laid down in Regulation (EU) 2019/2088, but with the addition of governance matters.

Amendment 90 #

Proposal for a directive
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 ensure decent work, fair wages, rights of workers and trade unions and take account of the interests of the undertaking’s 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 91 #

Proposal for a directive
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, 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 activities include impacts directly caused by the undertaking, impacts to which the undertaking contributes, and impacts which are otherwise linked to the undertaking’s supply and value chain. The due diligence process, notably human rights and environmental due diligence, 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 92 #

Proposal for a directive
Recital 27 a (new)

(27a) As is apparent from their wording, under no circumstances should the UN Guiding Principles on Business and Human Rights be interpreted as imposing new obligations of international law;

Amendment 93 #

Proposal for a directive
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.deleted

Amendment 94 #

Proposal for a directive
Recital 29

(29) Articles 19a(1) and 29a(1) of Directive 2013/34/EU do not specify whether the information to be reported is to be forward looking or information about past performance. There is currently a lack of forward-looking disclosures, which users of sustainability information especially value. Articles 19a and 29a of Directive 2013/34/EU should therefore specify that the sustainability information reported shall include forward-looking and retrospective, and both qualitative and quantitative information. Reported sustainability information should also take into account short, medium and long-term time horizons and contain information about the undertaking’s whole value chain, including its own operations, its products and services, its business relationships, and its supply chain~~, as appropriate~~. Information about the undertaking’s whole value chain would include information related to its value chain within the EU and information that covers third countries if the undertaking’s value chain extends outside the EU.

Amendment 95 #

Proposal for a directive
Recital 33

(33) ~~No existing standard or framework satisfies the Union’s needs for detailed sustainability reporting by itself~~For the development of its own sustainability reporting standards, the Union must ensure consistency with equivalent global standards. Information required by Directive 2013/34/EU needs to cover information relevant from each of the materiality perspectives, and needs to cover all sustainability matters ~~and needs to be aligned~~. To avoid duplication of obligations and inconsistencies in definitions, scope and objectives of applicable requirements, sustainability information needs to be consistent, where appropriate, with other obligations under Union law to disclose sustainability information, including obligations laid down in Regulation (EU) 2020/852 and Regulation (EU) 2019/2088. In addition, mandatory sustainability reporting standards for Union undertakings must be commensurate with the Union's social-economic objectives under Article 3(3) of the Treaty on European Union and the level of ambition of the European Green Deal and the Union’s climate- neutrality objective for 2050. It is therefore necessary to empower the Commission to adopt Union sustainability reporting standards in view of the development of international standards, enabling their rapid adoption and ensuring that the content of sustainability reporting standards are consistent with the Union’s needs.

Amendment 96 #

Proposal for a directive
Recital 33

(33) No existing standard or framework satisfies the Union’s needs for detailed sustainability reporting by itself. Information required by Directive 2013/34/EU needs to cover information relevant from each of the materiality perspectives, needs to cover all sustainability matters and needs to be aligned, where appropriate, with other obligations under Union law to disclose sustainability information, including obligations laid down in Regulation (EU) 2020/852 and Regulation (EU) 2019/2088. In addition, mandatory sustainability reporting standards for Union undertakings must be commensurate with the level of ambition of the European Green Deal and the Union’s climate-neutrality objective for 2050. It is therefore necessary to empower the Commission to adopt Union sustainability reporting standards, enabling their rapid adoption and ensuring that the content of sustainability reporting standards are consistent with the Union’s needs. These standards are not binding, as the Commission does not have legislative powers; such powers are held by Parliament and the Council.

Amendment 97 #

Proposal for a directive
Recital 34

(34) The European Commission should guarantee the inclusion of trade unions in the development of sustainability reporting standards, and to include other relevant stakeholders. The European Commission may rely partly on the technical advice of 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 However, the current structure, governance and functioning of EFRAG does not provide for the involvement of workers' representatives and civil society organisations. For example, EFRAG currently requires stakeholders to pay a fee in order to participate in its work which is a barrier for the participation of some stakeholder and entails a risk of conflict of interests with others. Importandt 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 fhanges regarding the governance of EFRAG are necessary in order to prevent all conflicts of interests and guarantee the inclusion of non- cor 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 developrate stakeholders. When adopting sustainability reporting standards technical advice from EFRAG should thus be sought only as part of a broader consultation that provides for the meaningful participation of non- corporate stakeholders. 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).

Amendment 98 #

Proposal for a directive
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 based on and developed with ~~the expertise of relevant stakeholder~~a broad consultation involving social partners, consumer organisations, NGOs and other relevant stakeholders, who should be able to participate in the standard setting process on equal footing and without fees. 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).

Amendment 99 #

Proposal for a directive
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. However, these guidelines are not binding, since they are not issued by an institution with legislative powers. They should also take account of other reporting requirements in Directive 2013/34/EU 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 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. 2017/C 215/01. 61 2019/C 209/01.

source: 702.955

2021/12/13 ENVI 316 amendments...

Amendment 100 #

Proposal for a directive
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 ~~appropriate~~necessary 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 101 #

Proposal for a directive
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, soil, water and biodiversity. Regulation (EU) 2020/852 provides a classification of the environmental objectives of the Union. For reasons of coherence, it is ~~appropriate~~necessary 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

(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 103 #

Proposal for a directive
Recital 41

(41) With regard to climate-related information, users are interested in knowing about undertakings’ physical and transition risks, and about their resilience to different climate scenarios and public policies for climate change mitigation and energy transition. 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 create. The reporting standards should therefore specify the information undertakings should report with regard to those matters.

Amendment 104 #

Proposal for a directive
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 105 #

Proposal for a directive
Recital 42 a (new)

(42a) Achieving a climate neutral economy is also posing significant risk to employment levels and quality, especially in transition sectors and regions. Therefore, undertakings in those sectors and regions should also report on possible risks and negative trends regarding productivity, competitiveness, employment and incomes, due to flaws in the transition process.

Amendment 106 #

Proposal for a directive
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 43

Amendment 108 #

Proposal for a directive
Recital 43

Amendment 109 #

Proposal for a directive
Recital 43

Amendment 110 #

Proposal for a directive
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 46

Amendment 112 #

Proposal for a directive
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 that have severe impacts on 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 113 #

Proposal for a directive
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 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 115 #

Proposal for a directive
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 20223. 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 20234, 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 review the standards every 35 years to take account of relevant developments~~, including~~. The Commission may, when necessary, amend the standards to align them with the development of international standards.

Amendment 116 #

Proposal for a directive
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 including but not limited to climate change and biodiversity 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 review the standards every 3 years to take account of relevant developments, including the development of international standards.

Amendment 117 #

Proposal for a directive
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 47 a (new)

(47a) Undertakings active in the extractive industry as defined in Article 41 (1) of directive 2013/34/EU should 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 extractive industry is a major cause of climate change (particularly through fossil fuel production). It also stands to be transformed by the energy transition, which will likely result in a drastic reduction in the production of fossil fuels and a substantial increase in the exploitation of minerals needed for clean energy technology. European capital markets are exposed to climate-related risk with the vulnerability of coal, oil and gas companies being particularly pronounced. These climate related risks will also have real consequences for extractive industry stakeholders in producing countries.

Amendment 119 #

Proposal for a directive
Recital 47 a (new)

(47a) Undertakings active in the extractive industry as defined in Article 41 (1) of directive 2013/34/EU should be subject to additional sustainability disclosure requirements. Undertakings active in the extractive industry must be required to publish the contracts and other documents upon which these projects are based. Publication of contracts should be accompanied with publication of related impact assessments and management plans.

Amendment 120 #

Proposal for a directive
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. Access to oil, gas and mining contracts agreed between governments and extractive industry companies is important to measure the environmental performance of oil, gas and mining companies. It is common for host governments to detail specific environmental obligations for the extractive industries in contracts, particularly where national environmental legislation does not provide detail on these issues. Many contracts include stabilization clauses that provide investors with protection from changes in the law. Contractual clauses may restrict application of new climate regulations. Arbitration and force majeure clauses, also common in contracts, may also discourage host governments from taking action on climate change. Contracts detail the overall distribution of risk and reward between governments, companies and citizens affected by extractive industry projects. Without an understanding of this information it is impossible for stakeholders to make sufficient plans for an orderly and just transition to a greener economy. Environmental impact assessments and management plans are usually linked to extractive industry contracts, and can be considered as part of the wider group of documents that are associated with extractive industry contracts. Publication of contracts should be accompanied with publication of related impact assessments and management plans.

Amendment 121 #

Proposal for a directive
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 122 #

Proposal for a directive
Recital 49

(49) To allow for and ensure the inclusion of the reported sustainability information in the European single access point, Member States should ensure that undertakings publish the duly approved annual financial statements and the management report in the prescribed electronic format, and ensure that management reports containing sustainability reporting are made available, without delay following their publication, to the relevant officially appointed mechanism referred to in Article 21(2) of Directive 2004/109/EC.

Amendment 123 #

Proposal for a directive
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 progress towards a more ~~gender-~~balanced participation in terms of non- discrimination for reasons of gender in economic decision-making, it is necessary to ensure that undertakings with securities listed on regulated markets always report on their ~~gender diversity policies~~policies regarding non- discrimination for reasons of gender and the implementation thereof. However, to avoid unnecessary 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 124 #

Proposal for a directive
Recital 53

(53) The assurance profession distinguishes between limited and reasonable assurance engagements. The conclusion of a limited assurance engagement is usually provided in a negative form of expression by stating that no matter has been identified by the practitioner to conclude that the subject matter is materially misstated. The auditor performs fewer tests than in a reasonable assurance engagement. The amount of work for a limited assurance engagement is therefore less than for reasonable assurance. The work effort in a reasonable assurance engagement entails extensive procedures including consideration of internal controls of the reporting undertaking and substantive testing, and is therefore significantly higher than in a limited assurance engagement. The conclusion of this type of engagement is usually provided in a positive form of expression and states an opinion on the measurement of the subject matter against previously defined criteria. Article 19a(5) and Article 29a(5) of Directive 2013/34/EU require Member States to ensure that the statutory auditor or audit firm checks whether the non-financial statement or the separate report has been provided. It does not require that an independent provider of assurance services verifies the information, although it allows Member States to require such verification where they wish to. The absence of an assurance requirement on sustainability reporting, in contrast to the requirement for the statutory auditor to perform a reasonable assurance engagement on financial statements, would threaten the credibility of the sustainability information disclosed, thus failing to meet the needs of the intended users of that information. Although the objective is to have a similar level of assurance for financial and sustainability reporting, the absence of a commonly agreed standard for the assurance of sustainability reporting creates the risk of different understandings and expectations of what a reasonable assurance engagement would consist of for different categories of sustainability information, especially with regard to forward looking and qualitative disclosures. Therefore, a progressive approach to enhance the level of the assurance required for sustainability information should be considered, starting with an obligation on the statutory auditor or audit firm to express an opinion about the compliance of the sustainability reporting with Union requirements based on a limited assurance engagement. This opinion should cover the compliance of the sustainability reporting with Union sustainability reporting standards, the process carried out by the undertaking to identify the information reported pursuant to the sustainability reporting standards and compliance with the requirement to mark- up sustainability reporting. The auditor should also assess whether the undertaking’s reporting complies with the reporting requirements of Article 8 of Regulation (EU) 2020/852. To guarantee a common understanding and expectations of what a reasonable assurance engagement would consist of, the Commission should adopt assurance standards for reasonable assurance of sustainability reporting by 31 October 2023. The statutory auditor or audit firm should be required to express an opinion based on a reasonable assurance engagement about the compliance of the sustainability reporting with Union requirements~~, should the Commission adopt assurance standards for reasonable assurance of sustainability reporting~~. This would also allow for the progressive development of the assurance market for sustainability information, and of undertakings’ reporting practices. Finally, this progressive approach would phase in the increase in costs for reporting undertakings, given that reasonable assurance is more costly than limited assurance.

Amendment 125 #

Proposal for a directive
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 126 #

Proposal for a directive
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 industry. 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 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, COM/2021/199 final, 21 April 2021.

Amendment 127 #

Proposal for a directive
Recital 71

Amendment 128 #

Proposal for a directive
Recital 71

(71) ~~Member States are invited to~~The Commission will 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 administrative burden, and to publish the results of such assessments. ~~Member States should consider introducing measures to supp~~To support SMEs in applying the voluntary simplified reporting standards the Commission shall create an online tool to facilitate reporting in small and medium-sized enterprises, in order to avoid excessive administrative burden fort SMEs ~~in applying the voluntary simplified reporting standards~~under 250 employees, this should be done through a free of charge, easy to use and accessible online tool.

Amendment 129 #

Proposal for a directive
Article 1 – paragraph 1 – point 1

Amendment 130 #

Proposal for a directive
Article 1 – paragraph 1 – point 1

Directive 2013/34/EU
Article 1 – paragraph 3 – subparagraph 1 – point b a (new)

(ba) legal entities such as foundations and legal arrangements similar to trusts as referred to in Directive 2015/849 of the European Parliament and of the Council;

Amendment 131 #

Proposal for a directive
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

Directive 2013/34/EU
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 133 #

Proposal for a directive
Article 1 – paragraph 1 – point 2

Directive 2013/34/EU
Article 2 – paragraph 1 – point 19

~~(19) ’intangibles’ means non-physical resources that contribute to the undertaking’s value creation;~~deleted

Amendment 134 #

Pascal CANFIN, Nils TORVALDS, Martin HOJSÍK, María Soraya RODRÍGUEZ RAMOS, Susana SOLÍS PÉREZ, Catherine CHABAUD

Proposal for a directive
Article 1 – paragraph 1 – point 2

Directive 2013/34/EU
Article 2 – paragraph 1 – point 19

~~(19) ’intangibles’ means non-physical resources that contribute to the undertaking’s value creation;~~deleted

Amendment 135 #

Proposal for a directive
Article 1 – paragraph 1 – point 2

Directive 2013/34/EU
Article 2 – paragraph 1 – point 20 a (new)

(20a) “climate neutrality” and “net- zero” should be read in accordance with the Article 2 of the Regulation (EU)2021/1119 (“European Climate Law”).

Amendment 136 #

Proposal for a directive
Article 1 – paragraph 1 – point 2

Directive 2013/34/EU
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 137 #

Proposal for a directive
Article 1 – paragraph 1 – point 2

Directive 2013/34/EU
Article 2 – paragraph 1 – point 20 a (new)

(20a) A high-impact sector is a sector that is associated, as a result of its size, business and value chain characteristics, with a high likelihood of actual or potential severe impacts on sustainability matters.

Amendment 138 #

Pascal CANFIN, Nils TORVALDS, Martin HOJSÍK, Catherine CHABAUD

Proposal for a directive
Article 1 – paragraph 1 – point 2

Directive 2013/34/EU
Article 2 – paragraph 1 – point 20 a (new)

(20a) A 'high-risk sector' is a sector that is associated, as a result of its size, business and value chain characteristics, with a high likelihood of actual or potential severe impacts on sustainability matters.

Amendment 139 #

Proposal for a directive
Article 1 – paragraph 1 – point 2

Directive 2013/34/EU
Article 2 – paragraph 1 – point 20 b (new)

(20b) A ‘high-impact sector’ is a sector that is associated, as a result of its size, business and value chain characteristics, including suppliers and sub-contractors, with a high likelihood of actual or potential severe impacts on sustainability matters.

Amendment 140 #

Proposal for a directive
Article 1 – paragraph 1 – point 2

(20b) ‘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.

Amendment 141 #

Proposal for a directive
Article 1 – paragraph 1 – point 2

Directive 2013/34/EU
Article 2 – paragraph 1 – point 20 b (new)

(20b) A high-risk area means a geographical area that is associated with a high likelihood of actual or potential severe impacts on sustainability matters

Amendment 142 #

Pascal CANFIN, Nils TORVALDS, Martin HOJSÍK, María Soraya RODRÍGUEZ RAMOS, Susana SOLÍS PÉREZ, Catherine CHABAUD

Proposal for a directive
Article 1 – paragraph 1 – point 2

Directive 2013/34/EU
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
Article 1 – paragraph 1 – point 2

Directive 2013/34/EU
Article 2 – paragraph 1 – point 20 c (new)

(20c) ‘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 the European Climate Law objectives and with a 1.5°C climate scenario with no or limited overshoot as defined by the IPCC.

Amendment 144 #

Proposal for a directive
Article 1 – paragraph 1 – point 2

(20c) ‘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 damage to the environment; and the ease with which the harm could be remediated, restoring the environment or affected people to their prior state, cause the greatest harm relative to other impacts the undertaking has identified.

Amendment 145 #

Proposal for a directive
Article 1 – paragraph 1 – point 2

Directive 2013/34/EU
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 146 #

Proposal for a directive
Article 1 – paragraph 1 – point 2

Directive 2013/34/EU
Article 2 – paragraph 1 – point 20 c (new)

(20c) A target means measurable, specific, time-bound and, when applicable, science-based indicator.

Amendment 147 #

Proposal for a directive
Article 1 – paragraph 1 – point 2

Directive 2013/34/EU
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 148 #

Proposal for a directive
Article 1 – paragraph 1 – point 2

Directive 2013/34/EU
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 149 #

Proposal for a directive
Article 1 – paragraph 1 – point 3

Directive 2013/34/EU
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 150 #

Proposal for a directive
Article 1 – paragraph 1 – point 3

Directive 2013/34/EU
Article 19 a – paragraph 1

1. 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) and small and medium-sized undertakings which are high-impact undertakings which exceed on their balance sheet data the criterion of the average number of 10 employees during the financial year, 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 151 #

Pascal CANFIN, Nils TORVALDS, Martin HOJSÍK, Catherine CHABAUD

Proposal for a directive
Article 1 – paragraph 1 – point 3

Directive 2013/34/EU
Article 19 a – paragraph 1

1. Large undertakings ~~and, as of 1 January 2026, small and medium-sized undertakings which are undertakings ref~~shall include in the management report, or other re~~d to in Article 2, point (1), point (a), shall include in the management report~~ports in keeping with the preferences of the Member States, 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. As of 1 January 2026, the appropriateness of extending these provisions to the small and medium-sized enterprises referred to in Article 2, point (1), point (a) shall be assessed.

Amendment 152 #

Proposal for a directive
Article 1 – paragraph 1 – point 3

Directive 2013/34/EU
Article 19 a – paragraph 1

1. 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), and medium-sized undertakings which are operating certain economic activities in high-impact sectors 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
Article 1 – paragraph 1 – point 3

Directive 2013/34/EU
Article 19 a – paragraph 1

1. Large undertakings and, as of 1 January 20264, small and medium-sized undertakings which are undertakings referred to in Article 2, point (1), point (a), and as of 1 January 2025, small and medium-sized undertakings which are high-impact undertakings, 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 154 #

Proposal for a directive
Article 1 – paragraph 1 – point 3

Directive 2013/34/EU
Article 19 a – paragraph 1

1. 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), and small and medium-sized undertakings operating in high-risk sectors, 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 155 #

Proposal for a directive
Article 1 – paragraph 1 – point 3

Directive 2013/34/EU
Article 19 a – paragraph 1

Amendment 156 #

Proposal for a directive
Article 1 – paragraph 1 – point 3

Directive 2013/34/EU
Article 19 a – paragraph 1

1. 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),~~ 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. When sustainability matters have a negative impact on the development, performance and position of the undertaking, it shall be clearly indicated.

Amendment 157 #

Proposal for a directive
Article 1 – paragraph 1 – point 3

Directive 2013/34/EU
Article 19 a – paragraph 1

1. 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), shall include in the full audited 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 158 #

Proposal for a directive
Article 1 – paragraph 1 – point 3

Directive 2013/34/EU
Article 19 a – paragraph 2 – subparagraph 1 – point a

(a) When relevant to the reporting entity, a brief description of the undertaking's business model and strategy, including:

Amendment 159 #

Proposal for a directive
Article 1 – paragraph 1 – point 3

Directive 2013/34/EU
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
Article 1 – paragraph 1 – point 3

Directive 2013/34/EU
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;~~deleted

Amendment 161 #

Proposal for a directive
Article 1 – paragraph 1 – point 3

Directive 2013/34/EU
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 162 #

Proposal for a directive
Article 1 – paragraph 1 – point 3

Directive 2013/34/EU
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 including whether the resilience of the business model(s) has been verified by using a range of climate scenarios;

Amendment 163 #

Proposal for a directive
Article 1 – paragraph 1 – point 3

Directive 2013/34/EU
Article 19 a – paragraph 2 – subparagraph 1 – point a – point ii

~~(ii) the opportunities for the undertaking related to sustainability matters;~~deleted

Amendment 164 #

Proposal for a directive
Article 1 – paragraph 1 – point 3

Directive 2013/34/EU
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 165 #

Proposal for a directive
Article 1 – paragraph 1 – point 3

Directive 2013/34/EU
Article 19 a – paragraph 2 – subparagraph 1 – point a – point ii

(ii) the opportunities and risks for the undertaking related to sustainability matters;

Amendment 166 #

Proposal for a directive
Article 1 – paragraph 1 – point 3

Directive 2013/34/EU
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 Agreement;~~ including a transition pathway, comprising of short-term and medium- term absolute emission reduction targets for 2025 and 2030, reviewed every five years up to 2050, to achieve carbon neutrality by 2050 at the latest, and implementing actions and related financial and investment plans, 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 Agreement with no or limited overshoot and recourse to compensation technologies, and pursuant to the latest recommendations of the IPCC and the European Scientific Advisory Board on Climate Change; and the degree of exposure of the undertaking to sectors listed in Divisions 05, 06,09, 19, 35, 46.71, 73.1 of Annex I to Regulation (EC) No 1893/2006 insofar as they relate to coal, oil, gas-related activities;

Amendment 167 #

Pascal CANFIN, Nils TORVALDS, María Soraya RODRÍGUEZ RAMOS, Susana SOLÍS PÉREZ, Catherine CHABAUD

Proposal for a directive
Article 1 – paragraph 1 – point 3

Directive 2013/34/EU
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 Agreement~~climate-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
Article 1 – paragraph 1 – point 3

Directive 2013/34/EU
Article 19 a – paragraph 2 – subparagraph 1 – point a – subpoint 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 Agreement;~~including a transition plan with implementing actions and related financial and investment plans, to ensure that its business model and strategy are aligned with the intermediate objectives for 2030 and 2040 laid out in the European Climate Law - Regulation (EU) 2021/1119 and with the objective to achieve carbon neutrality by 2050 at the latest and compatible with the transition to a sustainable economy and with the limiting of global warming to 1.5 °C in line with the Paris Agreement taking into account the entire value chain, including suppliers and sub-contractors; and where relevant the degree of exposure of the undertaking to sectors listed in Divisions 05, 06,09, 19, 35, 46.71, 73.1 of Annex I to Regulation (EC) No 1893/2006 insofar as they relate to coal, oil, gas-related activities.

Amendment 169 #

Proposal for a directive
Article 1 – paragraph 1 – point 3

Directive 2013/34/EU
Article 19 a – paragraph 2 –subparagraph 1 – point a – point iii

(iii) the plans of the undertaking including a transition pathway, comprising of short-term and medium- term absolute emission reduction targets for 2025 and 2030 to achieve carbon neutrality by 2050 at the latest, and implementing actions and related financial and investment plans, 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 Agreement; with no or limited overshoot and recourse to compensation technologies, and pursuant to the latest recommendations of the IPCC;

Amendment 170 #

Proposal for a directive
Article 1 – paragraph 1 – point 3

Directive 2013/34/EU
Article 19 a – paragraph 2 – subparagraph 1 – point a – point iii

(iii) the plans of the undertaking including a pathway comprising of short- term and medium-term absolute emission reduction targets for 2025 and 2030, reviewed every five years up to 2050, to achieve climate carbon neutrality by 2050 at the latest, and implementing actions and related financial and investment plans, 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 Agreement;

Amendment 171 #

Proposal for a directive
Article 1 – paragraph 1 – point 3

Directive 2013/34/EU
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 Agreement; however only where this reporting element is relevant and achievable for the reporting entities;

Amendment 172 #

Proposal for a directive
Article 1 – paragraph 1 – point 3

Directive 2013/34/EU
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 Agreement;~~.

Amendment 173 #

Proposal for a directive
Article 1 – paragraph 1 – point 3

Directive 2013/34/EU
Article 19 a – paragraph 2 – subparagraph 1 – point a – point iii

Amendment 174 #

Proposal for a directive
Article 1 – paragraph 1 – point 3

Directive 2013/34/EU
Article 19 a – paragraph 2 – subparagraph 1 – point a – point iii

(iii) the transitional plans of the undertaking to ensure that its business model and strategy are compatible with the transition to a sustainable economy, climate neutrality and with the limiting of global warming to 1.5 °C in line with the Paris Agreement;

Amendment 175 #

Proposal for a directive
Article 1 – paragraph 1 – point 3

Directive 2013/34/EU
Article 19 a – paragraph 2 – subparagraph 1 – point a – point iv

(iv) how the undertaking’s business model and strategy take account of the ~~interests of the undertaking’s stakeholders and of the~~ impacts of the undertaking on sustainability matters;

Amendment 176 #

Proposal for a directive
Article 1 – paragraph 1 – point 3

Directive 2013/34/EU
Article 19 a – paragraph 2 – subparagraph 1 – point a – point v

(v) how sustainability matters and related science-based targets, in connection with risks, opportunities, and severe impacts, have been integrated into the undertaking’s strategy, and how the undertaking’s strategy has been implemented with regard to sustainability matters;

Amendment 177 #

Proposal for a directive
Article 1 – paragraph 1 – point 3

Directive 2013/34/EU
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 178 #

Proposal for a directive
Article 1 – paragraph 1 – point 3

Directive 2013/34/EU
Article 19 a – paragraph 2 – subparagraph 1 – point a – point v

Amendment 179 #

Proposal for a directive
Article 1 – paragraph 1 – point 3

Directive 2013/34/EU
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 180 #

Proposal for a directive
Article 1 – paragraph 1 – point 3

Directive 2013/34/EU
Article 19 a – paragraph 2 – subparagraph 1 – point b

(b) a description of the t~~argets related to sustainability matters set by the undertaking~~ime-bound short-term, mid-term and long-term targets set by the undertaking with respect to the undertaking's risks, opportunities, severe impacts and timely alignment with relevant public goals, whether such targets are science-based alongside corresponding evidence, implementing actions and related financial and investment plans and of the progress the undertaking has made towards achieving those targets;

Amendment 181 #

Pascal CANFIN, Nils TORVALDS, Martin HOJSÍK, Catherine CHABAUD

Proposal for a directive
Article 1 – paragraph 1 – point 3

Directive 2013/34/EU
Article 19 a – paragraph 2 – subparagraph 1 – point b

(b) a description of the t~~argets related to sustainability matters set by the undertaking~~ime-bound short-term, mid-term and long-term targets set by the undertaking with respect to the principal risks, opportunities, severe impacts and timely alignment with relevant public goals, whether such targets are science-based alongside corresponding evidence, implementing actions and related investment plans and of the progress the undertaking has made towards achieving those targets;

Amendment 182 #

Proposal for a directive
Article 1 – paragraph 1 – point 3

Directive 2013/34/EU
Article 19 a – paragraph 2 – subparagraph 1 – point b

(b) a description of the t~~argets related to sustainability matters set by the undertaking~~ime-bound short-term, mid-term and long-term targets set by the undertaking for the main impacts of its business model on sustainability matters, whether such targets are science-based and of the progress the undertaking has made towards achieving those targets;

Amendment 183 #

Proposal for a directive
Article 1 – paragraph 1 – point 3

Directive 2013/34/EU
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 184 #

Proposal for a directive
Article 1 – paragraph 1 – point 3

Directive 2013/34/EU
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 severe impacts, including any direct engagement with the stakeholders affected by the identified impacts; (ii) discussing the risks to the undertaking and opportunities for the undertaking related to sustainability matters; (iii) approving the undertaking’s strategy and science-based 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; (v) expertise on sustainability matters possessed by the members of the administrative, management and supervisory bodies;

Amendment 185 #

Proposal for a directive
Article 1 – paragraph 1 – point 3

Directive 2013/34/EU
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, when applicable;

Amendment 186 #

Proposal for a directive
Article 1 – paragraph 1 – point 3

Directive 2013/34/EU
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 187 #

Proposal for a directive
Article 1 – paragraph 1 – point 3

Directive 2013/34/EU
Article 19 a – paragraph 2 – subparagraph 1 – point d

(d) a description of the undertaking’s policies in relation to sustainability matters including at minimum with respect to identified severe impacts, risks, and opportunities;

Amendment 188 #

Proposal for a directive
Article 1 – paragraph 1 – point 3

Directive 2013/34/EU
Article 19 a – paragraph 2 – subparagraph 1 – point e – point i

(i) the due diligence process i~~mplemented 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
Article 1 – paragraph 1 – point 3

Directive 2013/34/EU
Article 19 a – paragraph 2 – subparagraph 1 – point e – point i

(i) the due diligence process implemented with regard to sustainability matters; in line with applicable EU legislation on due diligence [Directive XXX] and the UN Guiding Principles for Business and Human Rights and the OECD Due Diligence Guidance for Responsible Business Conduct, 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

Amendment 190 #

Proposal for a directive
Article 1 – paragraph 1 – point 3

Directive 2013/34/EU
Article 19 a – paragraph 2 – subparagraph 1 – point e – point i

(i) the due diligence process implemented with regard to sustainability matters in line with applicable EU legislation on due diligence [Directive XXX];

Amendment 191 #

Proposal for a directive
Article 1 – paragraph 1 – point 3

Directive 2013/34/EU
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 chain~~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 192 #

Proposal for a directive
Article 1 – paragraph 1 – point 3

Directive 2013/34/EU
Article 19 a – paragraph 2 – subparagraph 1 – point e – point ii

(ii) the ~~principal~~ actual or potential adseverse impacts connected with the undertaking’s value chain as identified through the due diligence process, including its own operations, its products and services, its business relationships, its subsidiaries, and its supply chain, including information on people affected by those impacts and 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 193 #

Proposal for a directive
Article 1 – paragraph 1 – point 3

Directive 2013/34/EU
Article 19 a – paragraph 2 – subparagraph 1 – point e – point ii

(ii) the principal actual or potential adverse impacts and the significant harm in any of the environmental categories (related to the six environmental objectives of the Taxonomy Regulation), connected with the undertaking’s value chain, including its own operations, its products and services, its business relationships and its supply chain;

Amendment 194 #

Proposal for a directive
Article 1 – paragraph 1 – point 3

Directive 2013/34/EU
Article 19 a – paragraph 2 – subparagraph 1 – point e – point ii

Amendment 195 #

Proposal for a directive
Article 1 – paragraph 1 – point 3

Directive 2013/34/EU
Article 19 a – paragraph 2 – subparagraph 1 – point e – point iii

~~(iii) any actions taken, and the result of such actions, to prevent, mitigate or remediate actual or potential adverse impacts;~~deleted

Amendment 196 #

Proposal for a directive
Article 1 – paragraph 1 – point 3

Directive 2013/34/EU
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 3

Directive 2013/34/EU
Article 19 a – paragraph 2 – subparagraph 1 – point e – point iii

(iii) any actions taken, and the result of such actions, to prevent, mitigate or remediate actual or potential adseverse impacts and the effectiveness of their results;

Amendment 198 #

Proposal for a directive
Article 1 – paragraph 1 – point 3

Directive 2013/34/EU
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 199 #

Proposal for a directive
Article 1 – paragraph 1 – point 3

Directive 2013/34/EU
Article 19 a – paragraph 2 – subparagraph 1 – point f a (new)

(fa) the sustainability risks relevant to the particular business as defined in Article 2(a) of the Regulation 2019/2088/EU on sustainability‐related disclosures in the financial services sector, enabling financial market participants as defined in Article 2(s a) of that Regulation to meet their sustainability risk disclosure and mitigation obligations as defined in Article 4 and 5 of that Regulation;

Amendment 200 #

Proposal for a directive
Article 1 – paragraph 1 – point 3

Directive 2013/34/EU
Article 19 a – paragraph 2 – subparagraph 1 – point g

(g) indicators relevant to the disclosures referred to in points (a) to (f), including key performance indicators set out in the delegated act supplementing Article 8 of the Regulation (EU) 2020/852.

Amendment 201 #

Pascal CANFIN, Nils TORVALDS, Martin HOJSÍK, María Soraya RODRÍGUEZ RAMOS, Susana SOLÍS PÉREZ, Catherine CHABAUD

Proposal for a directive
Article 1 – paragraph 1 – point 3

Directive 2013/34/EU
Article 19 a – paragraph 2 – subparagraph 1 – point g

(g) indicators relevant to the disclosures referred to in points (a) to (f), including key performance indicators set out in the delegated act supplementing Article 8 of the Regulation (EU) 2020/852.

Amendment 202 #

Proposal for a directive
Article 1 – paragraph 1 – point 3

Directive 2013/34/EU
Article 19 a – paragraph 2 – subparagraph 1 – point g

(g) indicators relevant to the disclosures referred to in points (a) to (f) including performance indicators set out in the delegated act supplementing Article 8 of the Regulation (EU) 2020/852.

Amendment 203 #

Proposal for a directive
Article 1 – paragraph 1 – point 3

Directive 2013/34/EU
Article 19 a – paragraph 2 – subparagraph 1 – point g

(g) indicators relevant to the disclosures referred to in points (a) to (f).

Amendment 204 #

Proposal for a directive
Article 1 – paragraph 1 – point 3

Directive 2013/34/EU
Article 19 a – paragraph 2 – subparagraph 2

~~Undertakings shall also disclose information on intangibles, including information on intellectual, human, and social and relationship capital.~~deleted

Amendment 205 #

Proposal for a directive
Article 1 – paragraph 1 – point 3

Directive 2013/34/EU
Article 19 a – paragraph 2 – subparagraph 2

~~Undertakings shall also disclose information on intangibles, including information on intellectual, human, and social and relationship capital.~~deleted

Amendment 206 #

Proposal for a directive
Article 1 – paragraph 1 – point 3

Directive 2013/34/EU
Article 19 a – paragraph 2 – subparagraph 2 a (new)

For an undertaking that makes a voluntary and public pledge to align its business model, strategy and operations with the transition towards an economy compatible with the Paris Agreement, or to the objectives of the Union in terms of “climate neutrality” or " net-zero", the information referred to in Paragraph 2, Point (a) (iii) shall contain a detailed description of the following elements: (i) the undertaking’s use of a projected 1.5 degrees Celsius increase in global temperature when determining the transition pathway of the undertaking, and to assess the vulnerability to and the negative impacts on climate of the undertaking; (ii) short-term and mid-term targets based on the best scientific knowledge available, and on existing international initiatives, where relevant, including targets for at least the years 2030 and 2040; (iii) the strategy conceived by the undertaking to achieve the long term and the interim targets referred to in point (ii); (iv) periodic reports on the progress achieved towards the long term and the interim targets established by the strategy referred to in point (iii); (v) evidence of the coherence between the emission reduction strategy of the undertaking and the sectoral emission reduction pathways; when publicly available pathways are not used, a robust explanation for why they are deemed inadequate for the purposes of the undertaking shall be provided; (vi) evidence of the consistency between the business and growth forecasts of the undertaking and the emission reduction strategy; (vii) the role and importance of offsets, natural and artificial sinks, carbon avoidance, capture and storage and carbon and usage technologies, if deemed necessary by the undertaking, to achieve the long- and interim targets set by the undertaking.

Amendment 207 #

Proposal for a directive
Article 1 – paragraph 1 – point 3

Directive 2013/34/EU
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 208 #

Proposal for a directive
Article 1 – paragraph 1 – point 3

Directive 2013/34/EU
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 3

Directive 2013/34/EU
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 and in this process they ~~shall~~may, if necessary, take account of short, medium and long-term horizons.

Amendment 210 #

Proposal for a directive
Article 1 – paragraph 1 – point 3

Directive 2013/34/EU
Article 19 a – paragraph 2 – subparagraph 3 a (new)

Undertakings shall discuss and adopt the transitional plans referred to in paragraph 1, point (a), point (iii) as a separate item in their annual meetings.

Amendment 211 #

Proposal for a directive
Article 1 – paragraph 1 – point 3

Directive 2013/34/EU
Article 19 a – paragraph 3 – subparagraph 2

Where ~~appropriate~~necessary 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 3

Directive 2013/34/EU
Article 19 a – paragraph 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, to the extent possible. This provision should not be construed as an obligation to share business sensitive information.

Amendment 213 #

Proposal for a directive
Article 1 – paragraph 1 – point 3

Directive 2013/34/EU
Article 19 a – paragraph 3 – subparagraph 2

Where ~~appropriate~~necessary for the understanding of the undertaking's impacts or 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, assets, products and services, its business relationships and its supply chain, involved in such risks and impacts.

Amendment 214 #

Proposal for a directive
Article 1 – paragraph 1 – point 3

Directive 2013/34/EU
Article 19 a – paragraph 3 – subparagraph 4

Member States may allow information relating to impending devel-opments or matters in the course of negotiation to be omitted in excep-tional cases where, in the duly justified opinion of the members of the administrative, management and supervisory bodies, acting within the competences assigned to them by national law and having collective responsibility for that opinion, the disclosure of such information would be seriously prejudicial to the commercial position of the undertaking, provided that such omission does not prevent a fair and balanced under-standing of the undertaking's development, performance, position and impact of its activity.deleted

Amendment 215 #

Proposal for a directive
Article 1 – paragraph 1 – point 3

Directive 2013/34/EU
Article 19 a – paragraph 3 – subparagraph 4

Member States may allow information relating to impending devel-opments or matters in the course of negotiation to be omitted in ~~excep-tional~~certain cases where, in the duly justified opinion of the members of the administrative, management and supervisory bodies, acting within the competences assigned to them by national law and having collective responsibility for that opinion, the disclosure of such information would be seriously prejudicial to the commercial and competitive position of the undertaking, provided that such omission does not prevent a fair and balanced under-standing of the undertaking's development, performance, position and impact of its activity.

Amendment 216 #

Proposal for a directive
Article 1 – paragraph 1 – point 3

Directive 2013/34/EU
Article 19 a – paragraph 3 – subparagraph 4

Member States ~~may~~shall allow information relating to impending developments or matters in the course of negotiation to be omitted in exceptional cases where, in the duly justified opinion of the members of the administrative, management and supervisory bodies, acting within the competences assigned to them by national law and having collective responsibility for that opinion, the disclosure of such information would be seriously prejudicial to the commercial position of the undertaking, provided that such omission does not prevent a fair and balanced understanding of the undertaking's development, performance, position and impact of its activity.

Amendment 217 #

Proposal for a directive
Article 1 – paragraph 1 – point 3

Directive 2013/34/EU
Article 19 a – paragraph 3 – subparagraph 4 a (new)

The Commission shall prepare non- binding guidelines, taking into consideration technical advice from EFRAG, on appropriate methodology to generate the forward-looking information to be provided in the reporting. The guidelines shall be short and concise and take into account the administrative burden of the reporting undertaking.

Amendment 218 #

Proposal for a directive
Article 1 – paragraph 1 – point 3

Directive 2013/34/EU
Article 19 a – paragraph 5

Amendment 219 #

Proposal for a directive
Article 1 – paragraph 1 – point 3

Directive 2013/34/EU
Article 19 a – paragraph 5

5. By way of derogation from Article 19a, paragraphs 1 to 4, small and medium sized undertakings referred to in Article 2, point (1), point (a), may voluntarily report in accordance with the sustainability reporting standards for small and medium sized undertakings referred to in Article 19c.

Amendment 220 #

Proposal for a directive
Article 1 – paragraph 1 – point 3

Directive 2013/34/EU
Article 19a – paragraph 5 a (new)

5a. In accordance with Article 34, Member States shall ensure that the management report is audited by one or more statutory auditors or audit firms approved by Member States to carry out statutory audits on the basis of Directive2006/43/EC.

Amendment 221 #

Proposal for a directive
Article 1 – paragraph 1 – point 3

Directive 2013/34/EU
Article 19a – paragraph 7

~~[...]~~deleted

Amendment 222 #

Proposal for a directive
Article 1 – paragraph 1 – point 3

Directive 2013/34/EU
Article 19 a – paragraph 7 – subparagraph 1

An undertaking which is a subsidiary undertaking shall be exempted from the obligations set out in paragraphs 1 ~~to 4 if~~ and 2, with exception of obligations set out in paragraph 1 (b), (e) and (f), and corresponding obligations set out in (g), if that undertaking and its subsidiary undertakings are included in the consolidated management report of a parent undertaking, drawn up in accordance with Articles 29 and 29a. An undertaking that is a subsidiary undertaking from a parent undertaking that is established in a third country shall also be exempted from the obligations set out in paragraphs 1 ~~to 4~~and 2, with the exception of obligations set out in paragraph 1 (b), (e) and (f), and the corresponding obligations set out in (g), where that undertaking and its subsidiary undertakings are included in the consolidated management report of that parent undertaking and where the consolidated management report is drawn up in a manner that may be considered equivalent, in accordance with the relevant implementing measures adopted pursuant to Article 23(4), point (i), of Directive 2004/109/EC of the European Parliament and of the Council*6, to the manner required by the sustainability reporting standards referred to in Article 19b of this Directive. __________________ *6 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 223 #

Proposal for a directive
Article 1 – paragraph 1 – point 3

Directive 2013/34/EU
Article 19a – paragraph 7 – subparagraph 2

Amendment 224 #

Proposal for a directive
Article 1 – paragraph 1 – point 3

Directive 2013/34/EU
Article 19a – paragraph 7 – subparagraph 2

Amendment 225 #

Proposal for a directive
Article 1 – paragraph 1 – point 3

Directive 2013/34/EU
Article 19a – paragraph 7 – subparagraph 3

Amendment 226 #

Proposal for a directive
Article 1 – paragraph 1 – point 3

Directive 2013/34/EU
Article 19a – paragraph 7 – subparagraph 3

Amendment 227 #

Proposal for a directive
Article 1 – paragraph 1 – point 3

Directive 2013/34/EU
Article 19 a – paragraph 7 – subparagraph 3

The Member State by which the undertaking that is exempted from the obligations set out in paragraphs 1 ~~to 4~~and 2, with the exception of obligations set out in paragraph 1 (b), (e) and (f), and the corresponding obligations set out in (g), is governed, may require that the consolidated management report referred to in the first subparagraph of this paragraph is published in an official language of the Member State or in a language customary in the sphere of international finance, and that any necessary translation into those languages is certified.

Amendment 228 #

Proposal for a directive
Article 1 – paragraph 1 – point 3

Directive 2013/34/EU
Article 19 a – paragraph 7 – subparagraph 4

The management report of an undertaking that is exempted from the obligations set out in paragraphs 1 to 4 shall contain all of the following information: (a) the parent undertaking that reports information at group level in accordance with Articles 29 and 29a, or in a manner that may be considered equivalent, in accordance with the implementing measures adopted pursuant to Article 23(4), point (i) of Directive 2004/109/EC, to the manner required by the sustainability reporting standards referred to in Article 19b; (b) exempted from the obligations set out in paragraphs 1 to 4 of this Article.deleted the name and registered office of the fact that the undertaking is

Amendment 229 #

Proposal for a directive
Article 1 – paragraph 1 – point 3

Directive 2013/34/EU
Article 19 a – paragraph 7 – subparagraph 4 – introductory part

The management report of an undertaking that is exempted from the obligations set out in paragraphs 1 ~~to 4~~and 2, with the exception of obligations set out in paragraph 1 (b), (e) and (f), and the corresponding obligations set out in (g), shall contain all of the following information:

Amendment 230 #

Proposal for a directive
Article 1 – paragraph 1 – point 3

(b) the fact that the undertaking is exempted from the obligations set out in paragraphs 1 ~~to 4~~and 2, with exception of obligations set out in paragraph 1 (b), (e) and (f), and corresponding obligations set out in (g), of this Article.

Amendment 231 #

Proposal for a directive
Article 1 – paragraph 1 – point 3

Directive 2013/34/EU
Article 19 a – paragraph 7 a (new)

7a. The Commission shall, by 31 October 2023 at the latest, adopt a delegated act in accordance with Article 49 listing for which sectors small and medium sized-undertakings are to report according to Articles 19a and 29a. The list of sectors shall list sectors according to the Division level of NACE Rev, 2 as defined by Article 2(c) of Regulation (EC) No1893/2006. The delegated act shall list sectors that according to their nature or their overall impact on environmental, social or governance factors pose a high risk on sustainability matters.

Amendment 232 #

Proposal for a directive
Article 1 – paragraph 1 – point 4 – introductory part

(4) the following Articles 19b~~, 19c~~ and 19d are inserted:

Amendment 233 #

Proposal for a directive
Article 1 – paragraph 1 – point 4

Directive 2013/34/EU
Article 19b – paragraph 1 – subparagraph 1 – introductory part

The Commission shall adopt delegated acts in accordance with Article 49 to provide for sustainability reporting standards. European standards should support and contribute to the process to develop standards by the International Sustainability Standards Board. Those sustainability reporting standards shall specify the information that undertakings are to report in accordance with Articles 19a and 29a and, where relevant, shall specify the structure in which that information shall be reported. In particular:

Amendment 234 #

Pascal CANFIN, Nils TORVALDS, Martin HOJSÍK, María Soraya RODRÍGUEZ RAMOS, Susana SOLÍS PÉREZ, Catherine CHABAUD

Proposal for a directive
Article 1 – paragraph 1 – point 4

The Commission shall adopt delegated acts in accordance with Article 49 to provide for sustainability reporting standards. European standards should contribute to the process to develop standards by the International Sustainability Standards Board. Those sustainability reporting standards shall specify the information that undertakings are to report in accordance with Articles 19a and 29a and, where relevant, shall specify the structure in which that information shall be reported. In particular:

Amendment 235 #

Proposal for a directive
Article 1 – paragraph 1 – point 4

Directive 2013/34/EU
Article 19b – paragraph 1 – subparagraph 1 – introductory part

Amendment 236 #

Proposal for a directive
Article 1 – paragraph 1 – point 4

Directive 2013/34/EU
Article 19b – paragraph 1 – subparagraph 1 – point a

(a) by 31 October 20223, the Commission shall adopt delegated acts specifying the information that undertakings are to report in accordance with paragraphs 1 and 2 of Article 19a, and at least specifying information corresponding to the needs of financial market participants subject to the disclosure obligations of Regulation (EU) 2019/2088.

Amendment 237 #

Proposal for a directive
Article 1 – paragraph 1 – point 4

Directive 2013/34/EU
Article 19b – paragraph 1 – subparagraph 1 – point b – introductory part

(b) by 31 October 20234, the Commission shall adopt delegated acts specifying:

Amendment 238 #

Proposal for a directive
Article 1 – paragraph 1 – point 4

Directive 2013/34/EU
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, prioritizing the high-impact sectors referred to in Annex IIa.

Amendment 239 #

Proposal for a directive
Article 1 – paragraph 1 – point 4

Directive 2013/34/EU
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 240 #

Proposal for a directive
Article 1 – paragraph 1 – point 4

Directive 2013/34/EU
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. , prioritizing the high-risk sectors;

Amendment 241 #

Proposal for a directive
Article 1 – paragraph 1 – point 4

Directive 2013/34/EU
Article 19b – paragraph 1 – subparagraph 2

The Commission shall, at least every three years after its date of application, review any delegated act adopted pursuant to this Article~~, taking into considerati~~. It shall guarantee the involvement of trade unions in that process, and include other relevant stakeholders and civil society organisations. The European Commission may rely on the technical advice of the European Financial Reporting Advisory Group (EFRAG), and where necessary shall amend such delegated act to take into account relevant developments, including developments with regard to international standards.

Amendment 242 #

Proposal for a directive
Article 1 – paragraph 1 – point 4

Directive 2013/34/EU
Article 19b – paragraph 1 – subparagraph 2

The Commission shall, ~~at least~~ every ~~thre~~five 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), and where necessary shall amend such delegated act to ~~take into account~~ensure consistency with relevant developments, including developments with regard to international standards.

Amendment 243 #

Proposal for a directive
Article 1 – paragraph 1 – point 4

Directive 2013/34/EU
Article 19b – paragraph 1 – subparagraph 2 a (new)

Any new reporting requirements set out in such delegated acts shall not be applicable earlier than twelve months from the date of their entry into force.

Amendment 244 #

Proposal for a directive
Article 1 – paragraph 1 – point 4

Directive 2013/34/EU
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 245 #

Proposal for a directive
Article 1 – paragraph 1 – point 4

Directive 2013/34/EU
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. They shall therefore integrate disclosures on both risks and opportunities related to sustainability, be comprehensive by taking into account the entire scope of responsibility regarding the value chain of the company, including suppliers and sub-contractors, provide both quantitative and qualitative information, apply a sector-specific approach, and provide information with time and sector comparison.

Amendment 246 #

Proposal for a directive
Article 1 – paragraph 1 – point 4

Directive 2013/34/EU
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, based on science based harmonised, comparable and uniform indicators and consistent with the harmonised life cycle assessment, and is represented in a faithful manner.

Amendment 247 #

Proposal for a directive
Article 1 – paragraph 1 – point 4

Directive 2013/34/EU
Article 19b – paragraph 2 – subparagraph 1

Amendment 248 #

Proposal for a directive
Article 1 – paragraph 1 – point 4

Directive 2013/34/EU
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 249 #

Proposal for a directive
Article 1 – paragraph 1 – point 4

Directive 2013/34/EU
Article 19b – paragraph 2 – subparagraph 2 – point a – subpoint –i (new)

(-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 250 #

Proposal for a directive
Article 1 – paragraph 1 – point 4

Directive 2013/34/EU
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 251 #

Proposal for a directive
Article 1 – paragraph 1 – point 4

Directive 2013/34/EU
Article 19b – paragraph 2 – subparagraph 2 – point a – point i

(i) climate change mitigation, including - emissions on all scopes of greenhouse gas emissions including Scope 1, 2 and 3 GHG emissions, and other relevant indicators; - the transition, financial and investment plans and absolute emission reduction targets of the undertaking for 2025 and 2030, reviewed every five years up to 2050 and targeted date to achieve carbon neutrality; and - 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 and recourse to compensation technologies, pursuant to the latest evidence provided by the IPCC;

Amendment 252 #

Proposal for a directive
Article 1 – paragraph 1 – point 4

Directive 2013/34/EU
Article 19b – paragraph 2 – subparagraph 2 – point a – point i

(i) climate change mitigation; including - emissions on all scopes of greenhouse gas emissions including Scope 1, 2 and 3 GHG emissions; - investment plans and absolute emission reduction targets of the undertaking for 2025 and 2030, reviewed every five years and targeted date to achieve carbon neutrality; and - 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 and recourse to compensation technologies, pursuant to the latest evidence provided by the IPCC;

Amendment 253 #

Proposal for a directive
Article 1 – paragraph 1 – point 4

Directive 2013/34/EU
Article 19b – paragraph 2 – subparagraph 2 – point a – point iii

(iii) water and marine resources; including targets to limit the use and pollution of water;

Amendment 254 #

Proposal for a directive
Article 1 – paragraph 1 – point 4

Directive 2013/34/EU
Article 19b – paragraph 2 – subparagraph 2 – point a – point iii

(iii) ~~water and marine~~The sustainable use and protection of water, marine, and soil resources;

Amendment 255 #

Proposal for a directive
Article 1 – paragraph 1 – point 4

Directive 2013/34/EU
Article 19b – paragraph 2 – subparagraph 2 – point a – point iii

(iii) the sustainable use and protection of water and marine resources;

Amendment 256 #

Pascal CANFIN, Nils TORVALDS, Martin HOJSÍK, María Soraya RODRÍGUEZ RAMOS, Susana SOLÍS PÉREZ, Catherine CHABAUD

Proposal for a directive
Article 1 – paragraph 1 – point 4

Directive 2013/34/EU
Article 19b – paragraph 2 – subparagraph 2 – point a – point iv

(iv) ~~resource use and circular economy~~The 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 4

Directive 2013/34/EU
Article 19b – paragraph 2 – subparagraph 2 – point a – point iv

(iv) ~~resource use and circular economy~~the transition to a circular economy, including resource use;

Amendment 258 #

Proposal for a directive
Article 1 – paragraph 1 – point 4

Directive 2013/34/EU
Article 19b – paragraph 2 – subparagraph 2 – point a – point iv

(iv) ~~resource use and circular economy~~the transition to a circular economy, including resource use;

Amendment 259 #

Rob ROOKEN

Proposal for a directive
Article 1 – paragraph 1 – point 4

Directive 2013/34/EU
Article 19b – paragraph 2 – subparagraph 2 – point a – point v

~~(v) pollution;~~deleted

Amendment 260 #

Proposal for a directive
Article 1 – paragraph 1 – point 4

Directive 2013/34/EU
Article 19b – paragraph 2 – subparagraph 2 – point a – point v

(v) pollution; including plastic pollution and diffuse pollution, targets to reduce pollution and detailed plans to achieve those targets;

Amendment 261 #

Proposal for a directive
Article 1 – paragraph 1 – point 4

Directive 2013/34/EU
Article 19b – paragraph 2 – subparagraph 2 – point a – point v

(v) ~~pollution~~direct, indirect and diffuse pollution, prevention and control;

Amendment 262 #

Proposal for a directive
Article 1 – paragraph 1 – point 4

Directive 2013/34/EU
Article 19b – paragraph 2 – subparagraph 2 – point a – point v

(v) pollution prevention and control;

Amendment 263 #

Proposal for a directive
Article 1 – paragraph 1 – point 4

Directive 2013/34/EU
Article 19b – paragraph 2 – subparagraph 2 – point a – point vi

(vi) biodiversity and ecosystems; including targets to reduce biodiversity loss, deforestation and impacts on wildlife, as well as detailed plans to achieve those targets;

Amendment 264 #

Proposal for a directive
Article 1 – paragraph 1 – point 4

Directive 2013/34/EU
Article 19b – paragraph 2 – subparagraph 2 – point a – point vi

(vi) ~~biodiversity and ecosystems~~animal welfare, the protection and restoration of biodiversity and ecosystems including commodity driven deforestation, ecosystem degradation and land use;

Amendment 265 #

Proposal for a directive
Article 1 – paragraph 1 – point 4

Directive 2013/34/EU
Article 19b – paragraph 2 – subparagraph 2 – point a – point vi

(vi) protection and restoration of biodiversity and ecosystems;

Amendment 266 #

Proposal for a directive
Article 1 – paragraph 1 – point 4

Directive 2013/34/EU
Article 19b – paragraph 2 – subparagraph 2 – point a a (new)

(aa) When specifying the information about environmental factors that undertakings are to disclose, coherence should be ensured with the reporting requirements of the Taxonomy Regulation article 8

Amendment 267 #

Proposal for a directive
Article 1 – paragraph 1 – point 4

Directive 2013/34/EU
Article 19b – paragraph 2 – subparagraph 2 – point b – introductory part

(b) specify the information that undertakings are to disclose about social factors, ~~including~~limited to information about:

Amendment 268 #

Proposal for a directive
Article 1 – paragraph 1 – point 4

Directive 2013/34/EU
Article 19b – paragraph 2 – subparagraph 2 – point b – introductory part

(b) specify the information that undertakings are to disclose about social factors~~, including information about~~:

Amendment 269 #

Proposal for a directive
Article 1 – paragraph 1 – point 4

Directive 2013/34/EU
Article 19b – paragraph 2 – subparagraph 2 – point b – point i

(i) equal opportunities for all, including gender equality and equal pay for equal work, training and skills development, employment and inclusion of people with opposing political views, and employment and inclusion of people with disabilities;

Amendment 270 #

Proposal for a directive
Article 1 – paragraph 1 – point 4

Directive 2013/34/EU
Article 19b – paragraph 2 – subparagraph 2 – point b – point i

(i) equal opportunities for all, including ~~gender equality~~non-discrimination for reasons of gender and equal pay for equal work, training and skills development, and employment and inclusion of people with disabilities;

Amendment 271 #

Proposal for a directive
Article 1 – paragraph 1 – point 4

Directive 2013/34/EU
Article 19b – paragraph 2 – subparagraph 2 – point b – point ii

Amendment 272 #

Proposal for a directive
Article 1 – paragraph 1 – point 4

Directive 2013/34/EU
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 273 #

Proposal for a directive
Article 1 – paragraph 1 – point 4

Directive 2013/34/EU
Article 19b – paragraph 2 – subparagraph 2 – point b – point iii

(iii) ~~respect for~~implementation and results of the undertaking’s due diligence process to meet its responsibility to respect human rights, understood as those 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.

Amendment 274 #

Proposal for a directive
Article 1 – paragraph 1 – point 4

Directive 2013/34/EU
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 275 #

Proposal for a directive
Article 1 – paragraph 1 – point 4

Directive 2013/34/EU
Article 19b – paragraph 2 – subparagraph 2 – point c – introductory part

(c) specify the information that undertakings are to disclose about governance factors, ~~including~~limited to information about:

Amendment 276 #

Proposal for a directive
Article 1 – paragraph 1 – point 4

Directive 2013/34/EU
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 4

Directive 2013/34/EU
Article 19b – paragraph 2 – subparagraph 2 a (new)

All information that undertakings are to disclose about environmental factors as defined in point (a) shall be based on, and take account of relevant underlying indicators and methodologies set out in Regulation (EU) 2020/852 and the delegated acts adopted pursuant to it.

Amendment 278 #

Proposal for a directive
Article 1 – paragraph 1 – point 4

Directive 2013/34/EU
Article 19b – paragraph 3 – introductory part

3. When adopting delegated acts pursuant to paragraph 1, the Commission shall ensure consistency with 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. The Commission shall furthermore take account of:

Amendment 279 #

Proposal for a directive
Article 1 – paragraph 1 – point 4

Directive 2013/34/EU
Article 19b – paragraph 3 – point a

Amendment 280 #

Proposal for a directive
Article 1 – paragraph 1 – point 4

Directive 2013/34/EU
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

Directive 2013/34/EU
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 282 #

Proposal for a directive
Article 1 – paragraph 1 – point 4

Directive 2013/34/EU
Article 19b – paragraph 3 – point h a (new)

(ha) administrative burden and costs of the undertakings within the scope of this Directive.

Amendment 283 #

Proposal for a directive
Article 1 – paragraph 1 – point 4

Directive 2013/34/EU
Article 19b – paragraph 3 a (new)

3a. Undertakings subject to an obligation to prepare and make public a report on payments made to governments pursuant to Article 42 shall disclose, at project level as defined in Article 41 (b) (4), all documents and data required to understand their sustainability reporting under Article 19a. Documents shall include: (a) All contracts, licenses, leases and concessions including annexes and amendments, which provide the terms attached to the exploitation of oil gas and mineral resources; (b) Any agreements, or sets of agreements involving the provision of goods and services (including loans, grants and infrastructure works), in full or partial exchange for oil, gas or mining exploration or production concessions or physical delivery of such commodities; (c) Any agreements that mandate social expenditures by companies; (d) Any environmental and/or social impact assessments including the cumulative costs of inaction.

Amendment 284 #

Proposal for a directive
Article 1 – paragraph 1 – point 4

Directive 2013/34/EU
Article 19b a (new)

Article 19ba 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 substantial contribution criteria but do meet the Do No Significant Harm criteria specified in relevant Delegated Acts under Articles 10 to 15 of Regulation (EU) 2020/852; (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 neither meet the substantial contribution criteria nor the Do No Significant Harm criteria specified in relevant Delegated Acts under Articles 10 to 15 of Regulation (EU)2020/852. 3. The Commission shall adopt a delegated act in accordance with Article 49 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 in order to comply with them, taking into account the specificities of both financial and non-financial undertakings and the technical screening criteria established pursuant to this Regulation. The Commission shall adopt that delegated act by 31 October 2022.

Amendment 285 #

Proposal for a directive
Article 1 – paragraph 1 – point 4

Directive 2013/34/EU
Article 19b a (new)

Amendment 286 #

Proposal for a directive
Article 1 – paragraph 1 – point 4

Directive 2013/34/EU
Article 19b b (new)

Article 19bb Sustainability reporting related to undertakings required to report on payments to governments Undertakings subject to an obligation to prepare and make public a report on payments made to governments pursuant to article 42 shall disclose, at project level as defined in Article 41 (b) (4), all documents and data required to understand their sustainability reporting under article 19a. Documents shall include: (a) All contracts, licenses, leases and concessions including annexes and amendments, which provide the terms attached to the exploitation of oil gas and mineral resources; (b) Any agreements, or sets of agreements involving the provision of goods and services (including loans, grants and infrastructure works), in full or partial exchange for oil, gas or mining exploration or production concessions or physical delivery of such commodities; (c) Any agreements that mandate social expenditures by companies; (d) Any environmental and/or social impact assessments.

Amendment 287 #

Proposal for a directive
Article 1 – paragraph 1 – point 4

Directive 2013/34/EU
Article 19c

Sustainability reporting standards for 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 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. The Commission shall adopt those delegated acts at the latest by 31 October 2023.Article 19c deleted SMEs

Amendment 288 #

Proposal for a directive
Article 1 – paragraph 1 – point 4

Directive 2013/34/EU
Article 19c – paragraph 1

The Commission shall, following prior consultation of EFRAG, 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 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. EFRAG’s advisory opinion shall be shared with the European Parliament and the Council.

Amendment 289 #

Pascal CANFIN, Nils TORVALDS, Martin HOJSÍK, Catherine CHABAUD

Proposal for a directive
Article 1 – paragraph 1 – point 4

Directive 2013/34/EU
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 ~~which~~how 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 290 #

Proposal for a directive
Article 1 – paragraph 1 – point 4

Directive 2013/34/EU
Article 19c – paragraph 1 a (new)

The Commission shall be empowered to adopt delegated acts in accordance with Article 49 to establish and amend a list of high-impact sectors as defined in Article 1, paragraph 2, point 1. That list shall take into account the work of the Platform on Sustainable Finance established in accordance with Article 20 of Regulation(EU) 2020/852 and the OECD Due Diligence Guidance for Responsible Business Conduct, including for mining, extractive industries, agriculture, clothing and footwear, finance and international shipping. The list of sectors taken into account in this definition shall take account of correspondence with the NACE classification1a.

Amendment 291 #

Proposal for a directive
Article 1 – paragraph 1 – point 4

Directive 2013/34/EU
Article 19c – paragraph 1 a (new)

The Commission shall create an online tool to facilitate reporting for small and medium-sized enterprises

Amendment 292 #

Proposal for a directive
Article 1 – paragraph 1 – point 5 – point a

Directive 2013/34/EU
Article 20 – paragraph 1 – point g

(g) a description of the ~~diversity~~non- discrimination policy applied in relation to the undertaking's administrative, management and supervisory bodies with regard to gender and other aspects such as, age, or educational and professional backgrounds, the objectives of that ~~diversity~~non- discrimination policy, how it has been 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 293 #

Proposal for a directive
Article 1 – paragraph 1 – point 7

Directive 2013/34/EU
Article 29a – paragraph 1

1. Public-interest entities which are parent undertakings of a large group exceeding on its balance sheet data, on a consolidated basis, the criterion of the average number of 500 employees during the financial year shall include in the consolidated management report information necessary to understand the group's impacts on sustainability matters, and information necessary to understand how sustainability matters affect the group's development, performance and position.

Amendment 294 #

Proposal for a directive
Article 1 – paragraph 1 – point 7

Directive 2013/34/EU
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

Directive 2013/34/EU
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

Directive 2013/34/EU
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

Directive 2013/34/EU
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 Agreement~~climate-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 #

Pascal CANFIN, Catherine CHABAUD

Proposal for a directive
Article 1 – paragraph 1 – point 7

Directive 2013/34/EU
Article 29a – paragraph 2 – subparagraph 1 – point a – point iii

(iii) the plans of the group including a transition pathway, comprising of short- term and medium-term absolute emission reduction targets for 2025 and 2030, reviewed every five years up to 2050, to achieve carbon neutrality by 2050 at the latest, and implementing actions and related financial and investment plans, to ensure that the group’s business model and strategy compatible with the transition to a sustainable economy and with the limiting of global warming to 1.5 °C in line with the Paris Agreement with no or limited overshoot and recourse to compensation technologies, and pursuant to the latest recommendations of the IPCC; and the degree of exposure of the undertaking to sectors listed in Divisions 05, 06, 09, 19, 35, 46.71 of Annex I to Regulation (EC) No 1893/2006 insofar as they relate to coal, oil, gas-related activities;

Amendment 299 #

Proposal for a directive
Article 1 – paragraph 1 – point 7

Directive 2013/34/EU
Article 29a – paragraph 2 – subparagraph 1 – point a – point iii

(iii) the plans of the group including a transition plan with implementing actions and related financial and investment plans, to ensure that it~~he group’~~s business model and strategy ~~compatible with the transition to a sustainable economy and with the limiting of global warming to 1.5 °C in line with the Paris Agreement;~~ aligned with the intermediate objectives for 2030 and 2040 laid out in the European Climate Law - Regulation (EU) 2021/1119 and with the objective to achieve carbon neutrality by 2050 at the latest and compatible with the transition to a sustainable economy and with the limiting of global warming to 1.5 °C in line with the Paris Agreement taking into account the entire value chain; and where relevant the degree of exposure of the undertaking to sectors listed in Divisions 05, 06,09,19, 35, 46.71, 73.1 of Annex I to Regulation (EC) No 1893/2006 insofar as they relate to coal, oil, gas-related activities.

Amendment 300 #

Proposal for a directive
Article 1 – paragraph 1 – point 7

Directive 2013/34/EU
Article 29a – paragraph 2 – subparagraph 1 – point a – point iii

(iii) the plans of the group including a pathway comprising of short-term and medium-term absolute emission reduction targets for 2025 and 2030, and reviewed every five years thereafter, to achieve climate neutrality by 2050 at the latest, and implementing actions and related financial and investment plans to ensure that the group’s business model and strategy compatible with the transition to a sustainable economy and with the limiting of global warming to 1.5 °C in line with the Paris Agreement;

Amendment 301 #

Proposal for a directive
Article 1 – paragraph 1 – point 7

Directive 2013/34/EU
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 compatible with the transition to a sustainable economy ~~and with the limiting of global warming to 1.5 °C in line with the Paris Agreement~~;

Amendment 302 #

Proposal for a directive
Article 1 – paragraph 1 – point 7

Directive 2013/34/EU
Article 29a – paragraph 2 – subparagraph 1 – point a – point iii

Amendment 303 #

Proposal for a directive
Article 1 – paragraph 1 – point 7

Directive 2013/34/EU
Article 29a – paragraph 2 – subparagraph 1 – point a – point iii

(iii) the transitional plans of the group to ensure that the group’s business model and strategy are compatible with the transition to a sustainable economy, climate neutrality and with the limiting of global warming to 1.5 °C in line with the Paris Agreement;

Amendment 304 #

Proposal for a directive
Article 1 – paragraph 1 – point 7

Directive 2013/34/EU
Article 29a – paragraph 2 – subparagraph 1 – point a – point iv

(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;

Amendment 305 #

Proposal for a directive
Article 1 – paragraph 1 – point 7

Directive 2013/34/EU
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

(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 307 #

Proposal for a directive
Article 1 – paragraph 1 – point 7

Directive 2013/34/EU
Article 29a – paragraph 2 – subparagraph 1 – point b

(b) a description of the t~~argets related to sustainability matters set by the group~~ime-bound short-term, mid-term and long-term targets set by the group with respect to the risks, opportunities, severe impacts and timely alignment with relevant public goals, whether such targets are science- based alongside corresponding evidence, implementing actions and related financial and investment plans and of the progress of the undertaking towards achieving them;

Amendment 308 #

Proposal for a directive
Article 1 – paragraph 1 – point 7

Directive 2013/34/EU
Article 29a – paragraph 2 – subparagraph 1 – point b

(b) a description of the t~~argets related to sustainability matters set by the group~~ime-bound short-term, mid-term and long-term targets set by the group for the main impacts of its business model on sustainability matters, whether such targets are science-based and of the progress of the undertaking has made towards achieving th~~em;~~ose targets

Amendment 309 #

Proposal for a directive
Article 1 – paragraph 1 – point 7

Directive 2013/34/EU
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 31 #

Proposal for a directive
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 310 #

Proposal for a directive
Article 1 – paragraph 1 – point 7

Directive 2013/34/EU
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

Directive 2013/34/EU
Article 29a – paragraph 2 – subparagraph 1 – point e – point i

(i) the due diligence process i~~mplemented with regard to sustainability matters~~n 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

Directive 2013/34/EU
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 313 #

Proposal for a directive
Article 1 – paragraph 1 – point 7

Directive 2013/34/EU
Article 29a – paragraph 2 – subparagraph 1 – point e – point ii

(ii) the principal actual or potential adverse impacts and the significant harm in any of the environmental categories (related to the six environmental objectives of the Taxonomy Regulation), connected with the group’s value chain, including its own operations, its products and services, its business relationships and its supply chain;

Amendment 314 #

Proposal for a directive
Article 1 – paragraph 1 – point 7

Directive 2013/34/EU
Article 29a – paragraph 2 – subparagraph 1 – point e – point iii

Amendment 315 #

Proposal for a directive
Article 1 – paragraph 1 – point 7

Directive 2013/34/EU
Article 29a – paragraph 2 – subparagraph 1 – point f a (new)

(fa) the performance measured against sustainability indicators relevant to the particular business and industry, based on a list of harmonised sustainability indicators to be developed and updated by the European Commission, in coherence with the Regulation 2020/852/EU on the establishment of a framework to facilitate sustainable investment, and amending Regulation 2019/2088/EU;

Amendment 316 #

Pascal CANFIN, Catherine CHABAUD

Proposal for a directive
Article 1 – paragraph 1 – point 7

Directive 2013/34/EU
Article 29a – paragraph 2 – subparagraph 1 – point g

(g) indicators relevant to the relevant to the disclosures referred to in points (a) to (f)., including key performance indicators set out in the delegated act supplementing Article 8 of the Regulation (EU) 2020/852;

Amendment 317 #

Proposal for a directive
Article 1 – paragraph 1 – point 7

Directive 2013/34/EU
Article 29a – paragraph 2 – subparagraph 1 – point g

(g) indicators relevant to the relevant to the disclosures referred to in points (a) to (f). including performance indicators set out in the delegated act supplementing Article 8 of the Regulation (EU) 2020/852.

Amendment 318 #

Proposal for a directive
Article 1 – paragraph 1 – point 7

Directive 2013/34/EU
Article 29a – paragraph 2 – subparagraph 2

~~Parent undertakings shall also report information on intangibles, including information on intellectual, human, and social and relationship capital.~~deleted

Amendment 319 #

Proposal for a directive
Article 1 – paragraph 1 – point 7

Directive 2013/34/EU
Article 29a – paragraph 2 – subparagraph 2

~~Parent undertakings shall also report information on intangibles, including information on intellectual, human, and social and relationship capital.~~deleted

Amendment 32 #

Proposal for a directive
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 320 #

Proposal for a directive
Article 1 – paragraph 1 – point 7

Directive 2013/34/EU
Article 29a – paragraph 2 – subparagraph 3 a (new)

For a parent undertaking that publicly pledges to align its business model, strategy and operations to a transition towards an economy compatible with the Paris Agreement, or to the objective of the Union’s “climate neutrality” or " net- zero", the information referred to in Paragraph 2, Point (a) (iii) shall contain a detailed description of the following elements: (i) the climate scenario of 1.5 degrees Celsius used to assess the vulnerability to and the negative impacts on climate of the group, and to calculate its transition pathway; when publicly available scenarios are not used, a robust justification for why they are deemed not adequate shall be provided; (ii) short-term and mid-term targets based on the best scientific knowledge available, and on existing international initiatives, where relevant, including for at least the years 2030 and 2040; (iii) the strategy conceived by the group to achieve the long term and the interim targets defined in point (ii); (iv) periodic reports on the progress achieved towards the long term and the interim targets; (v) evidence of the coherence between the emission reduction strategy of the group and the sectoral emission reduction pathways; when publicly available pathways are not used, a robust justification for why they are deemed not adequate shall be provided; (vi) the relevance and the role of offsets, natural and artificial sinks, carbon avoidance, capture and storage and carbon and usage technologies, if deemed necessary by the undertaking, to achieve the long- and interim targets set by the group.

Amendment 321 #

Proposal for a directive
Article 1 – paragraph 1 – point 7

Directive 2013/34/EU
Article 29a – paragraph 2 – subparagraph 3 a (new)

Parent undertakings shall discuss and adopt the transition plans referred to in paragraph 1, point (a), point (iii) as a separate item in their annual meetings.

Amendment 322 #

Proposal for a directive
Article 1 – paragraph 1 – point 7

Directive 2013/34/EU
Article 29a – paragraph 3 – subparagraph 2

The information referred to in paragraphs 1 and 2 shall include information about the group’s value chain, including its own operations, its products and services, its business relationships and its supply chain, where ~~appropriate~~necessary for understanding of the undertaking’s impacts or risks.

Amendment 323 #

Proposal for a directive
Article 1 – paragraph 1 – point 7

Directive 2013/34/EU
Article 29a – paragraph 3 – subparagraph 4

Member States may allow information relating to impending devel-opments or matters in the course of negotiation to be omitted in excep-tional cases where, in the duly justified opinion of the members of the administrative, management and supervisory bodies, acting within the competences assigned to them by national law and having collective responsibility for that opinion, the disclosure of such information would be seriously prejudicial to the commercial position of the group, provided that such omission does not prevent a fair and balanced under-standing of the group's development, performance, position and impact of its activity.deleted

Amendment 324 #

Proposal for a directive
Article 1 – paragraph 1 – point 7

Directive 2013/34/EU
Article 29a – paragraph 3 – subparagraph 4

Member States may allow information relating to impending devel-opments or matters in the course of negotiation to be omitted in ~~excep-tional~~certain cases where, in the duly justified opinion of the members of the administrative, management and supervisory bodies, acting within the competences assigned to them by national law and having collective responsibility for that opinion, the disclosure of such information would be seriously prejudicial to the commercial and competitive position of the group, provided that such omission does not prevent a fair and balanced under-standing of the group's development, performance, position and impact of its activity.

Amendment 325 #

Proposal for a directive
Article 1 – paragraph 1 – point 7

Directive 2013/34/EU
Article 29a – paragraph 3 – subparagraph 4

Member States ~~may~~shall allow information relating to impending developments or matters in the course of negotiation to be omitted in exceptional cases where, in the duly justified opinion of the members of the administrative, management and supervisory bodies, acting within the competences assigned to them by national law and having collective responsibility for that opinion, the disclosure of such information would be seriously prejudicial to the commercial position of the group, provided that such omission does not prevent a fair and balanced understanding of the group's development, performance, position and impact of its activity.

Amendment 326 #

Proposal for a directive
Article 1 – paragraph 1 – point 7

Directive 2013/34/EU
Article 29a – paragraph 5

5. By way of derogation from Article 29a, paragraphs 1-4, parent undertakings that are small and medium sized undertakings referred to in Article 2, point (1), point (a), may report in accordance with the sustainability reporting standards for small and medium sized undertakings referred to in Article 19c.deleted

Amendment 327 #

Proposal for a directive
Article 1 – paragraph 1 – point 7

Directive 2013/34/EU
Article 29a – paragraph 5

Amendment 328 #

Proposal for a directive
Article 1 – paragraph 1 – point 7

Directive 2013/34/EU
Article 29a – paragraph 7

Amendment 329 #

Proposal for a directive
Article 1 – paragraph 1 – point 7

Directive 2013/34/EU
Article 29a – paragraph 7 – subparagraph 3

The Member State by which the parent undertaking that is exempted from the obligations set out in paragraphs 1 to 4 is governed may require that the consolidated management report referred to in in the first subparagraph of this paragraph is published in its official language or in a language customary in the sphere of international finance, and that any necessary translation into those languages is certified.deleted

Amendment 33 #

Proposal for a directive
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 330 #

Proposal for a directive
Article 1 – paragraph 1 – point 10 – point a – point ii

Directive 2013/34/EU
Article 34 – paragraph 1 – subparagraph 2 – point aa

(aa) where applicable, express an opinion based on a limited assurance ~~engagement~~or, 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 331 #

Proposal for a directive
Article 1 – paragraph 1 – point 10 – point a a (new)

(aa) the following paragraph 2a is inserted 2a. Member States shall ensure that the management report of small, medium- sized and large undertakings is audited by one or more statutory auditors or audit firms approved by Member States to carry out statutory audits on the basis of Directive 2006/43/EC.

Amendment 332 #

Proposal for a directive
Article 1 – paragraph 1 – point 11 – point a

Directive 2013/34/EU
Article 49 – paragraph 2

2. The power to adopt delegated acts referred to in Article 1(2), Article 3(13), Article 46(2)~~, Article 19b~~ and Article 19cb shall be conferred on the Commission for an indeterminate period of time.

Amendment 333 #

Proposal for a directive
Article 1 – paragraph 1 – point 11 – point a

Directive 2013/34/EU
Article 49 – paragraph 3

3. The delegation of power referred to in Article 1(2), Article 3(13), Article 46(2)~~, Article 19b~~ and Article 19cb may be revoked at any time by the European Parliament or by the Council. A decision to revoke shall put an end to the delegation of the power specified in that decision. It shall take effect the day following the publication of that decision in the Official Journal of the European Union or at a later date specified therein. It shall not affect the validity of any delegated acts already in force.;

Amendment 334 #

Proposal for a directive
Article 1 – paragraph 1 – point 11 – point b

Directive 2013/34/EU
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 such~~the 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, and~~provided 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 335 #

Proposal for a directive
Article 1 – paragraph 1 – point 11 – point b

Directive 2013/34/EU
Article 49 – paragraph 3a – subparagraph 1

When adopting delegated acts pursuant to Articles 19b ~~and 19c~~, the Commission shall ensure consistency with the development of international standards and take into consideration technical advice from EFRAG, 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.

Amendment 336 #

Proposal for a directive
Article 1 – paragraph 1 – point 11 – point b

Directive 2013/34/EU
Article 49 – paragraph 3a – subparagraph 2

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 EFRAG prior to the adoption of the delegated acts referred to in Articles 19b ~~and 19c~~.

Amendment 337 #

Proposal for a directive
Article 1 – paragraph 1 – point 11 – point b

Directive 2013/34/EU
Article 49 – paragraph 3a – subparagraph 4

The Commission shall also 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 established pursuant to Article 20 of Regulation (EU) 2020/852 on the technical advice provided by EFRAG 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 338 #

Proposal for a directive
Article 1 – paragraph 1 – point 11 – point c

Directive 2013/34/EU
Article 49 – paragraph 5

5. A delegated act adopted pursuant to Article 1(2), Article 3(13), Article 46(2)~~, Article 19b~~ and Article 19cb shall enter into force only if no objection has been expressed either by the European Parliament or the Council within a period of ~~two~~four months of notification of that act to the European Parliament and the Council or if, before the expiry of that period, the European Parliament and the Council have both informed the Commission that they will not object. That period shall be extended by ~~two~~four months at the initiative of the European Parliament or the Council.

Amendment 339 #

Proposal for a directive
Article 1 – paragraph 1 – point 12

Directive 2013/34/EU
Article 51 – paragraph 3 – point f

~~(f) the level of cooperation of the natural person or legal entity responsible with the competent authority;~~deleted

Amendment 34 #

Proposal for a directive
Recital 4 a (new)

(4a) Rejects the Commission proposal

Amendment 340 #

Proposal for a directive
Article 1 – paragraph 1 – point 12 a (new)

Directive 2013/34/EU
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 341 #

Proposal for a directive
Article 3 – paragraph 1 – point 7

Directive 2006/43/EU
Article 14 – paragraph 2 – subparagraph 3

The aptitude test shall be conducted in one of the ~~languages permitted by the language rules applicable in the host Member State concerned~~EU official languages. It shall cover only the statutory auditor's adequate knowledge of the laws and regulations of that host Member State in so far as it is relevant to statutory audits and assurance engagements of sustainability reporting.

Amendment 342 #

Proposal for a directive
Article 3 – paragraph 1 – point 12

Directive 2006/43/EU
Article 26a – paragraph 3

3. Where the Commission adopts standards for reasonable assurance, the opinion referred to in Article 34(1), second subparagraph, point (aa) of Directive 2013/34/EU shall be based on a reasonable assurance engagement; however, the reasonable assurance engagement shall be voluntary for companies with fewer than 50 employees.

Amendment 343 #

Proposal for a directive
Article 5 – paragraph 1 – subparagraph 1

Member States shall bring into force the laws, regulations and administrative provisions necessary to comply with Articles 1 to 3 of this Directive by 1 December 20223. They shall immediately inform the Commission thereof.

Amendment 344 #

Proposal for a directive
Article 5 – paragraph 1 – subparagraph 2

Member States shall provide that the provisions referred to in the first subparagraph shall apply for financial years starting on or after 1 January 20234

Amendment 345 #

Proposal for a directive
Article 6 – paragraph 1

Article 4 of this Directive shall apply to financial years starting on or after 1 January 20237.

Amendment 346 #

Proposal for a directive
Article 6 – paragraph 1

Article 4 of this Directive shall apply to financial years starting on or after 1 January 20234.

Amendment 35 #

Proposal for a directive
Recital 5

(5) On 25 September 2015, the UN General Assembly adopted a new global sustainable development framework: the 2030 Agenda for Sustainable Development (the ‘2030 Agenda’). The 2030 Agenda has at its core the Sustainable Development Goals and covers the three dimensions of sustainability: economic, social and environmental. The Commission communication of 22 November 2016 on the next steps for a sustainable European future linked the Sustainable Development Goals to the Union policy framework ~~to ensure that all Union actions and policy initiatives, both in and beyond the Union, take those goals on board at the outset~~, albeit without a binding character45. In its conclusions of 20 June 2017, the Council confirmed the commitment of the Union and its Member States to the implementation of the 2030 Agenda in a full, coherent, comprehensive, integrated and effective manner, in close cooperation with partners and other stakeholders46. __________________ 45 COM(2016) 739 final. 46 Council conclusions “A sustainable European future: The EU response to the 2030 Agenda for Sustainable Development”, 20 June 2017.

Amendment 36 #

Proposal for a directive
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 37 #

Proposal for a directive
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 said large 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 relevant to the business. __________________ 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

(8) The ultimate beneficiaries of better sustainability reporting by undertakings armust be individual citizens and savers. Savers who want to invest ethically and sustainably ~~will~~must have the opportunity to do so, while all citizens ~~should~~will 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 39 #

Proposal for a directive
Recital 8

(8) The ultimate beneficiaries of better sustainability reporting by undertakings are individual citizens and savers. This benefit needs to be proportionate to the new burdens and obligations that the business fabric of the EU will face. Savers who want to invest sustainably will 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 organisations, 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. 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 value chains. Policy makers and environmental agencies may use such information, in particular on an aggregate basis, to monitor environmental and social 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. Many investors and asset managers purchase sustainability information from third party data providers, who collect information from various sources, including public corporate reports.

Amendment 40 #

Proposal for a directive
Recital 8

(8) The ultimate beneficiaries of better sustainability reporting by undertakings armust be individual citizens and savers. Savers who want to invest sustainably ~~will~~must have the opportunity to do so, while all citizens ~~should~~must 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. 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 value chains. Policy makers and environmental agencies may use such information, in particular on an aggregate basis, to monitor environmental and social 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. Many investors and asset managers purchase sustainability information from third party data providers, who collect information from various sources, including public corporate reports. There is an urgent need to make this data available at a reasonable cost.

Amendment 41 #

Proposal for a directive
Recital 8 a (new)

Amendment 42 #

Proposal for a directive
Recital 8 b (new)

Amendment 43 #

Proposal for a directive
Recital 8 c (new)

(8c) Reporting under this Directive should not affect trade secrets and company competitiveness.

Amendment 44 #

Proposal for a directive
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 45 #

Proposal for a directive
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~~EU institutions. That increase in demand is driven by ~~the changing nature of risks to undertak~~an ideological requirement that constraings ~~and growing investor awareness of the financial implications of these risks. That is especially the case for climate-related financial~~companies’ freedom of manoeuvre and corporate vision, putting their economic activity at risks. ~~Awareness of the risks to undertakings and to investments resulting from other environmental issues and from social issues, including health issues, is also g~~Part of that increase is the logical consequence of previously adopted Union legislation, notably Regulation (EU) 2019/2088 and Regulation (EU) 2020/852 with a view to increasing and improwving~~. T~~ the increase in demand for sustainability information is also driven by the growth in investment products that explicitly seek to meet certain sustainability standards or achieve certain sustainability objectives. Part of that increasformation provided by companies on sustainability. As a result of the legislation in force, most companies have adapted their internal reporting systems to meet the requirements that taxonomy, due diligence and the sustainable development of corporate governance impose. Therefore, the amendments made isn the ~~logical consequence of previously adopted Union legislation, notably Regulation (EU) 2019/2088 and Regulation (EU) 2020/852~~revision of this Directive should reduce and harmonise the reporting obligations provided for in other pieces of legislation. Some of the increase would have happened in any case, due to fast-changing awareness among citizens a~~warenes~~nd undertakings, consumer preferences and market practices. The COVID-19 pandemic will further accelerate the increase in users’ need for high-quality 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 46 #

Proposal for a directive
Recital 9 a (new)

(9a) The new reporting obligations will lead to new bureaucratic burdens and more complexity for operators. In order to facilitate the proper implementation of the new rules, efforts shall be made jointly with the Member States to put in place effective systems offering technical and financial advice, particularly for SMEs.

Amendment 47 #

Proposal for a directive
Recital 10

(10) USome undertakings ~~themselves stand to~~may benefit from carrying out high quality reporting on sustainability matters despite increased costs and administrative burdens related to compliance with the new obligations. The growth in the number of investment products that aim to pursue sustainability objectives means that good sustainability reporting can enhance an undertaking’s access to financial capital. Sustainability reporting can help undertakings to identify and manage their own risks and opportunities related to sustainability matters. It can provide a basis for better dialogue and communication between undertakings and their stakeholders, and can help undertakings to improve their reputation.

Amendment 48 #

Proposal for a directive
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 49 #

Proposal for a directive
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. 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 even if they provide it on a voluntary basis so as to improve transparency and communication regarding their activities. __________________ 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 50 #

Proposal for a directive
Recital 12

(12) In the absence of p~~olicy action~~roportional policy action and of effective coordination of the different legislative instruments in place with regard to sustainability reporting, 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. 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. 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 i~~s also~~n some cases and the proliferation of indicators in others also constitute an obstacle to the efforts of undertakings to ensure that their business models and activities are sustainable. Simplification and the cost-benefit analysis will constitute some of the key indicators for assessing legislative measures in the area of non-financial reporting.

Amendment 51 #

Proposal for a directive
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 52 #

Proposal for a directive
Recital 12

(12) In the absence of policy action, such as, for example, an impact assessment study regarding legislation in force, 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. 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. 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.

Amendment 53 #

Proposal for a directive
Recital 15

Amendment 54 #

Proposal for a directive
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, all public interest entities, all small and medium sized undertakings operating in high-risk sectors or high risk-areas 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. Undertakings that are not established in the European Union but fulfil those criteria and operate in the single market should be subjected to the same requirements in order to account for their sustainability impacts and to provide a level playing field for undertakings established in the EU.

Amendment 55 #

Proposal for a directive
Recital 15

Amendment 56 #

Proposal for a directive
Recital 16

Amendment 57 #

Proposal for a directive
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 58 #

Proposal for a directive
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 59 #

Proposal for a directive
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 protection it is appropriate to require that also those SMEs disclose information on sustainability matters. 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. 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 standards on a voluntary basis. The SME standards will set a reference forSMEs should be exempted from additional requirements, and the obligation to disclose sustainability information should apply only to large undertakings tha~~t 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 value chains~~ving an average number of employees in excess of 500.

Amendment 60 #

Proposal for a directive
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 protection~~represented 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 ~~list~~and 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. ~~They~~SMEs 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 use~~to 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 61 #

Proposal for a directive
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 protection it is appropriate to require that also those SMEs disclose information on sustainability matters. 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. 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 alsoshould 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~~There must also be a timeline set for non-listed SMEs to 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 value chains.

Amendment 62 #

Proposal for a directive
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 protection it is appropriate to require that also those SMEs disclose limited information on sustainability matters. 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. 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 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 value chains. No public authority or publicly regulated entity whatsoever shall require or consider beneficial voluntary sustainability reporting from non-listed SMEs, including, but not limited to, as precondition for participation in public procurements, tenders etc.

Amendment 63 #

Proposal for a directive
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 protection it is appropriate to require that also those SMEs disclose information on sustainability matters. 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. 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. NA timeline should be set for non- listed SMEs ~~can also choose to use~~to 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 value chains.

Amendment 64 #

Proposal for a directive
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 65 #

Proposal for a directive
Recital 19

Amendment 66 #

Proposal for a directive
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 67 #

Proposal for a directive
Recital 24

(24) The list of sustainability matters on which undertakings are required to report should be as coherent as possible with the definition of ‘sustainability factors’ laid down in Regulation (EU) 2019/2088. That list should also correspond to the needs and expectations of users and undertakings themselves, who often use the terms ‘environmental’, ‘social’ and ‘governance’ as a means to categorise the three main sustainability matters. The list of sustainability factors laid down in Regulation (EU) 2019/2088 does not explicitly include governance matters. The definition of sustainability matters in Directive 2013/34/EU should therefore be based on the definition of ‘sustainability factors’ laid down in Regulation (EU) 2019/2088, but with the addition of governance matters. The list of environmentally sustainable matters should be based on, and take account of underlying indicators and methodologies set out in Regulation(EU) 2020/852 and various delegated acts adopted pursuant to it, as they jointly create a classification system of environmentally sustainable economic activities.

Amendment 68 #

Proposal for a directive
Recital 24

(24) The list of sustainability matters on which undertakings are required to report should be as coherent as possible with the definition of ‘sustainability factors’ laid down in Regulation (EU) 2019/2088. That list should also correspond to the needs and expectations of users and financial sector undertakings themselves, who often use the terms ‘environmental’, ‘social’ and ‘governance’ as a means to categorise the three main sustainability matters in said sector. The list of sustainability factors laid down in Regulation (EU) 2019/2088 does not explicitly include governance matters. The definition of sustainability matters in Directive 2013/34/EU should therefore be based on the definition of ‘sustainability factors’ laid down in Regulation (EU) 2019/2088, but with the addition of governance matters.

Amendment 69 #

Proposal for a directive
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~~climate-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

(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~~must 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 71 #

Proposal for a directive
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, the assessment by the undertaking of its impacts on sustainability matters, any plans they may have to ensure that their business model and strategy respect workers’ rights and potentially affected communities, 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 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 science-based and time-bound short-term, mid-term and long-term 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 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 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 73 #

Proposal for a directive
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 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 74 #

Proposal for a directive
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, 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 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.deleted

Amendment 75 #

Proposal for a directive
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, 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 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 76 #

Proposal for a directive
Recital 28

Amendment 77 #

Proposal for a directive
Recital 28

Amendment 78 #

Proposal for a directive
Recital 28

Amendment 79 #

Proposal for a directive
Recital 28

Amendment 80 #

Proposal for a directive
Recital 29

(29) Articles 19a(1) and 29a(1) of Directive 2013/34/EU do not specify whether the information to be reported is to be forward looking or information about past performance. There is currently a lack of forward-looking disclosures, which users of sustainability information especially value. Articles 19a and 29a of Directive 2013/34/EU should therefore specify that the sustainability information reported shall include forward-looking and retrospective, and both qualitative and quantitative information that is based on science based, harmonised, comparable and uniform indicators and consistent with the harmonised life cycle assessment. Reported sustainability information should also take into account short, medium and long-term time horizons and contain information about the undertaking’s whole value chain, including its own operations, its products and services, its business relationships, and its supply chain, as appropriate. Information about the undertaking’s whole value chain would include information related to its value chain within the EU and information that covers third countries if the undertaking’s value chain extends outside the EU.

Amendment 81 #

Proposal for a directive
Recital 29

(29) Articles 19a(1) and 29a(1) of Directive 2013/34/EU do not specify whether the information to be reported is to be forward looking or ~~information about past per~~retrospective informa~~nce~~tion. There is currently a lack of forward-looking disclosures, which users of sustainability information especially value, but might be sensitive from a perspective of business confidentiality. Articles 19a and 29a of Directive 2013/34/EU should therefore specify that the sustainability information reported shall include forward-looking and retrospective, and both qualitative and quantitative information, while not endangering the commercial position of the undertaking. Reported sustainability information should also take into account short, medium and long-term time horizons and contain information about the undertaking’s whole value chain, including its own operations, its products and services, its business relationships, and its supply chain, as appropriate. Information about the undertaking’s whole value chain would include information related to its value chain within the EU and information that covers third countries if the undertaking’s value chain extends outside the EU.

Amendment 82 #

Proposal for a directive
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 83 #

Proposal for a directive
Recital 33

(33) ~~No existing standard or framework satisfies the Union’s needs for detailed sustainability reporting by itself~~For developing its own sustainability reporting standards the Union should ensure consistency with global equivalent standards. Information required by Directive 2013/34/EU needs to cover information relevant from each of the materiality perspectives, needs to cover all sustainability matters ~~and needs to be aligned~~. To avoid duplication of obligations and inconsistencies in definitions, scope and objectives of applicable requirements, sustainability information needs to be consistent, where appropriate, with other obligations under Union law to disclose sustainability information, including obligations laid down in Regulation (EU) 2020/852 and Regulation (EU) 2019/2088. In addition, mandatory sustainability reporting standards for Union undertakings must be commensurate with the Union’s social-economic objectives under Article 3(3) of the Treaty on European Union and the level of ambition of the European Green Deal and the Union’s climate-neutrality objective for 2050. It is therefore necessary to empower the Commission to adopt Union sustainability reporting standards in view of the development of international standards, enabling their rapid adoption and ensuring that the content of sustainability reporting standards are consistent with the Union’s needs.

Amendment 84 #

Proposal for a directive
Recital 33

(33) No existing standard or framework satisfies the Union’s needs for detailed sustainability reporting by itself. Information required by Directive 2013/34/EU needs to cover information relevant from each of the materiality perspectives, needs to cover all sustainability matters and needs to be aligned, where appropriate, with other obligations under Union law to disclose sustainability information, including obligations laid down in Regulation (EU) 2020/852 and Regulation (EU) 2019/2088. This information must be based on science based, harmonised comparable and uniform indicators and consistent with the harmonised life cycle assessment. In addition, mandatory sustainability reporting standards for Union undertakings must be commensurate with the level of ambition of the European Green Deal and the Union’s climate-neutrality objective for 2050. It is therefore necessary to empower the Commission to adopt Union sustainability reporting standards, enabling their rapid adoption and ensuring that the content of sustainability reporting standards are consistent with the Union’s needs.

Amendment 85 #

Proposal for a directive
Recital 33

(33) No existing standard or framework satisfies the Union’s needs for detailed sustainability reporting by itself. Information required by Directive 2013/34/EU needs to cover information relevant from each of the materiality perspectives, needs to cover all sustainability matters and needs to be aligned, where appropriate, with other obligations under Union law to disclose sustainability information, including obligations laid down in Regulation (EU) 2020/852 and Regulation (EU) 2019/2088. In addition, mandatory sustainability reporting standards for Union undertakings must be commensurate with the level of ambition of the European Green Deal 2030 targets and the Union’s climate-neutrality objective for 2050. It is therefore necessary to empower the Commission to adopt Union sustainability reporting standards, enabling their rapid adoption and ensuring that the content of sustainability reporting standards are consistent with the Union’s needs.

Amendment 86 #

Proposal for a directive
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 87 #

Proposal for a directive
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. However, the current structure, governance and functioning of EFRAG does not provide for the involvement of workers’ representatives and civil society organisations. For example, EFRAG currently requires stakeholders to pay a fee in order to participate in its work, which is a barrier for the participation of some stakeholders and entails a risk of conflict of interests with others. Important changes regarding the governance of EFRAG are necessary in order to prevent all conflicts of interests and guarantee the inclusion of non- corporate stakeholders. 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).

Amendment 88 #

Proposal for a directive
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 89 #

Proposal for a directive
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 industry and the logging of forests, as well as other reporting requirement 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 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 90 #

Proposal for a directive
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~~ensure consistency with 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). Standards of the European Union should take account of any sustainability reporting standards developed under the auspices of International Financial Reporting Standards Foundation, in particular of the International Sustainability Standards Board (ISSB). 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. The EU sustainability standards should be based, as far as possible, on global equivalent sustainable reporting standards.

Amendment 91 #

Proposal for a directive
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 92 #

Proposal for a directive
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). 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, in particular by seeking alignment with the standards of the International Sustainability Standards Board.

Amendment 93 #

Proposal for a directive
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). 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, in particular by supporting the process to develop standards by the International Sustainability Standards Board.

Amendment 94 #

Pascal CANFIN, Nils TORVALDS, Martin HOJSÍK, María Soraya RODRÍGUEZ RAMOS, Susana SOLÍS PÉREZ, Catherine CHABAUD

Proposal for a directive
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). 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 support and contribute to the process ~~of convergence of sustainability reporting standards at global level~~to develop standards by the International Sustainability Standards Board.

Amendment 95 #

Proposal for a directive
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). 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 support and contribute to the process ~~of convergence of sustainability reporting standards at global level.~~to develop standards by the International Sustainability Standards Board

Amendment 96 #

Proposal for a directive
Recital 38

(38) In its communication on the European Green Deal, the European Commission committed to support businesses and other stakeholders in developing standardised natural capital accounting practices within the Union and internationally, with the aim of ensuring appropriate management of environmental risks and mitigation opportunities, and reduce related transaction costs. The Transparent Project sponsored under the LIFE programme is developing the first natural capital accounting methodology, which will make existing methods easier to compare and more transparent while lowering the threshold for companies to adopt and use the systems in support of future-proofing their business. The Natural Capital Protocol is also an important reference in this field. While natural capital accounting methods serve principally to strengthen internal management decisions, they should be duly considered when establishing sustainability reporting standards. Some natural capital accounting methodologies seek to assign a monetary value to the environmental impacts of companies’ activities, which may help users to better understand those impacts. It is therefore appropriate that sustainability reporting standards should be able to include monetised indicators of sustainability impacts if that is deemed necessary.deleted

Amendment 97 #

Proposal for a directive
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. Regulation (EU) 2020/852 provides a classification of the environmental objectives of the Union. For reasons of coherence, it is appropriate 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. Those reporting standards should take account of the size of the undertaking so that they do not impose a disproportionate bureaucratic burden.

Amendment 98 #

Proposal for a directive
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. Regulation (EU) 2020/852 provides a classification of the environmental objectives of the Union. For reasons of coherence, it is appropriate 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, including from the implementation of EU policies on climate change mitigation and energy transition.

Amendment 99 #