According to the press release of the European Parliament (EP), Sustainability: businesses interests must align with society’s interests, the EP wants to extend the scope of the Non-Financial Reporting Directive (NFRD) to all listed and non-listed large undertakings established in the EU, including non-EU companies operating in the Union.
In a resolution accepted in 2018 the EP called for widening the scope of NFRD to combatting crime in general (when Europe refers to ‘anti-corruption and bribery’ in reality combatting crime in general is meant).
European requirements for company directors
The EP asks the Commission to put forward a legislative proposal which clearly defines the responsibilities of executive directors when it comes to acting in the long-term interest of the company and society as a whole, as well as that of employees and stakeholders. Hopefully this will also include the duties of large companies to respect the position of small and medium-sized businessed, something that to my opinion should be included in the definition of sustainability and responsible business conduct.
It shows the growing European influence on company law and the tendency that governmental tasks are outsourced to private companies.
- EP press release: Sustainability: businesses interests must align with society’s interests, 17 December 2020.
- European Commission page on the Non-Financial Reporting Directive (NFRD).
- Report by the EP Think Tank: Towards a mandatory EU system of due diligence for supply chains, 22 October 2020.
- Study on directors’ duties and sustainable corporate governance, July 2020.