AMSTERDAM: European Commissioner for internal market and services Michel Barnier calls for increased accountability and transparency if Europe is to have a "strong and sustainable economic recovery".

Barnier made the comments on the second day of the Global Reporting Initiatives (GRI) global conference on sustainability reporting in Amsterdam, which has about 1,600 sustainability thought leaders and practitioners from around the globe in attendance.

Last month, the European Commission (EC) adopted a proposal directive requiring large companies to disclose information on the major economic, environmental and social impacts of their business as part of their annual reporting cycle on a ‘report or explain’ approach. The hope is the proposal will be the catalyst for greater transparency across the region.

Barnier said he hoped EU legislators, the European Parliament and EU Council would swiftly adopt the proposal and that subsequently other legislators would follow suit around the world.

"Europe is still recovering from the worst crisis in 50 years. I think this crisis is a turning point. We need safer financial institutions. More generally we need to eliminate the short-termism that has dominated the corporate sector for too long," he remarked.

Experience shows that transparent companies have lower financing costs, attract and retain talented employees, and are more successful in the long run."

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By GlobalData

Government representatives from Denmark and Sweden, countries which have already introduced legislation on a ‘comply or explain’ approach, were also at the conference to talk about their experiences. In Denmark’s case disclosure among its large companies has risen 97% since legislation was introduced in 2009. Norway and Finland also now have similar legislation.

GRI deputy chief executive Teresa Fogelberg described the role of political leadership in advancing business transparency and reporting as "crucial".

"The EU proposal demonstrates that regulation on non-financial reporting can be both bold and balanced. If this European proposal is implemented, the number of large EU companies reporting will jump from 1,800 to 18,000. Europe is showing leadership on this issue, and in many countries policy and regulation has already happened or will happen soon," she said.

With their policies, these countries point the way for the rest of the world to build on global frameworks like those of the UN Global Compact, OECD, and GRI."

Fogelberg said in terms of the "urgent need to switch to a more sustainable economy" the world must work together.

"Together, the combined efforts of policy makers across the globe can drive more and better reporting for a sustainable global economy and a better world."

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