The state’s expectations of business enterprises
Several new legal provisions proactively ensure the strengthening of respect for human rights in business, which involves non-financial reporting on the environmental and social impacts of major business enterprises, measures to promote equality, and considering environmental, social and labour law aspects in public procurement. (pg. 7)
Principle 2 – States sets expectation for respecting human rights
Slovenia has recently included several proactive provisions in national legislation to foster respect for human rights in business. An example is the Act Amending the Companies Act of April 2017, which introduces non-financial reporting on the environmental and social impacts of major enterprises and measures to promote equality. (pg. 10)
Principle 3d – Non-financial reporting
Slovenia has adopted a new legal regulation aimed at increasing the transparency of certain companies and at improving the adequacy, convergence and comparability of non-financial information, increasing the transparency and consequently the diversity in their administrative, management and supervisory bodies, increasing corporate responsibility and efficiency and thereby the effectiveness of the single market, and at improving corporate management.
In accordance with Directive 2014/95/EU, which requires that certain large companies disclose relevant non-financial information to provide investors and other interested parties with a more complete picture of the development, efficiency, status and environmental and social impacts of their activities, Slovenia incorporated the obligation of non-financial reporting for large companies into its legal system in April 2017. In addition, to create a transparent, effective and clear management system which fosters the trust of investors, employees and the general public in the corporate management system, Slovenia has extended the list of companies which are required to include non-financial statements in their annual reports. (pg. 21)
Non-financial reporting: In accordance with the Act Amending the Companies Act, which transposed Directive 2014/95/EU into the Slovenian legal order, large companies which are public-interest entities exceeding the average number of 500 employees must include a non-financial statement in the management report, containing information on their environmental and social impacts. Published as part of the annual report (or as a separate report), the statement must contain information at least on environmental, social and human resources issues, respect for human rights, and matters relating to the fight against corruption and bribery. The obligation to report also applies to large companies with the number of employees at the consolidated basis exceeding 500, which have to prepare consolidated annual plans.
In addition, all companies subject to audit have to outline the policy of representation diversity in their management or supervisory bodies (diversity based on gender, age, education). The diversity of skills and positions of members of management or supervisory bodies improves the understanding of business operations and openness to innovative ideas, prevents similarity of views, etc. The above provision is aimed at indirectly contributing, through such diversity, to the more successful management of companies. The monitoring and supervision of implementation of the abovementioned legal provisions will be entrusted to the Ministry of Economic Development and Technology.
As part of drafting policies and measures for restructuring and the transition to a circular economy, the Ministry of the Environment and Spatial Planning, in cooperation with other relevant ministries, will actively promote the use of voluntary environmental labelling instruments at the EU level, such as Ecolabel and EMAS. To this end, targeted expert support and assistance will be offered to companies and organisations through financial incentives and more widely by promoting sustainable production and consumption. (pg. 23)
Annex I – Guidelines on Corporate Human Rights Due Diligence
- Monitoring of, and reporting on, due diligence and respect for human rights
One of the basic principles of corporate social responsibility is transparency; therefore, it must be ensured that the enterprise report regularly comprehensively and clearly to stakeholders on its observance of human rights.
The simplest way for an enterprise to report observance of human rights is in its annual report, or a special sustainability report, or a corporate social responsibility report, in which it also reports on other non-financial aspects of business operations.
In planning the scope and structure of the report, the enterprise can draw from some international standards and initiatives that include human rights and have developed basic indicators for monitoring them, inter alia:
- EU directive on non-financial reporting for public-interest companies with morethan 500 employees (transposed to Slovenian legal order with the ActAmending the Companies Act),
- GRI guidelines on reporting on sustainability in business operations,
- ISO 26000 – social responsibility guidelines for enterprises,
- SA 8000 Certificate,
- Principles of the United Nations Global Compact.
By joining some of the Slovenian initiatives and by acquiring certificates, enterprises can fully or partially comply with requirements concerning human rights. Some of the relevant certificates are: Family-friendly company, Socially responsible company, EFQM excellence model, Golden Thread, Most respectable employer, HORUS – Slovenian award for social responsibility, Leader in social responsibility and sustainable development; alongside other means in support of this field. (pg. 47)