The European Parliament passed a new law on April 15 to force about 6,000 EU companies to disclose information about environmental compliance, human rights, bribery and corruption.
EU member states now have two years to implement the reform in their national legislation.
The law applies to listed companies, credit institutions and insurance firms. Only companies with more than 500 employees are covered.
Once implemented, companies will need to include the disclosures in their annual reports. Information about the reporting company’s supply chain is also required.
Unilever and Ikea spoke out in favor of the reporting requirements.
Lobbying group BusinessEurope argued that corporate social responsibility can only work if its is voluntary.
The German trade association BDI said many firms are already supplying corporate social responsibility reports on a voluntary basis.
Member states can grant exemptions from the reporting requirement.
European Commissioner Michel Barnier said “transparent companies have lower financing costs, attract and retain talented employees, and are more successful in the long term.”
The EU’s April 15, 2014 release is here.
Richard L. Cassin is the publisher and editor of the FCPA Blog. He can be contacted here.
Julie DiMauro is the executive editor of FCPA Blog and can be reached here.