A number of industry bodies have expressed support for the European Commission’s (EC) directive on non-financial reporting, which The Accountant broke on Monday.
The new directive requires large companies to include a disclosure statement called "fair review" in their annual reports, including information on environmental, social and employee related matters as well as human rights, anti-corruption and bribery.
The Global Reporting Initiative (GRI) got behind the directive, with its chief executive Theresa Fogelberg, describing the proposal as a "vital catalyst" needed to "usher in a new era of transparency in the largest economic region in the world."
The Institute of Chartered Accountants in England and Wales (ICAEW) also issued a statement of support for the directive. Its financial reporting faculty head Nigel Sleigh-Johnson called the adopted approach "generally balanced and proportionate".
"The ‘comply or explain’ aspect of the new regime is welcome, as is the decision to limit the proposals to the group level and to the largest EU businesses," he said.
However, Sleigh-Johnson warned that disclosures in annual reports must be "aimed squarely at the needs of investors, not other parties," but added he remained positive.
The Association of Chartered Certified Accountants (ACCA) said the increased transparency the directive will bring would help to improve trust amongst investors and stakeholders.
ACCA head of sustainability Rachel Jackson echoed these messages, however, she pointed out the EU now needs to provide information on "how such measures will be enforced, and what would be the consequences of non-compliance."