Sustainability Reporting

Sustainability reporting is when businesses formally disclose information related to sustainability, including on human rights risks and impacts. As defined by the Global Reporting Initiative (GRI), “sustainability reporting is the practice of publicly disclosing an organization’s most significant economic, environmental and/or social impacts, and hence its contributions – positive or negative – toward the goal of sustainable development.”

Sustainability reporting also includes the Environmental, Social, and Governance (ESG) reporting framework, which covers the disclosure of environmental, social, and corporate governance data. Within the ESG framework, human rights are primarily assessed under the S-Social pillar. This includes issues such as labour rights, non-discrimination, occupational health and safety, freedom of association, and the prevention of child and forced labour across a company’s own operations and value chain. While the E-environmental pillar focuses on a company’s impacts on the natural environment, such as climate change mitigation, greenhouse gas emissions, biodiversity, and pollution, the G-governance pillar relates to how a company is directed and controlled, covering issues such as internal controls and anti-corruption practices.

Sustainability reporting allows businesses to inform stakeholders about the interactions between business operations and their impacts on people and the planet, and to disclose human rights policies, risks, and outcomes. The reporting process details measures taken by businesses to identify and manage human rights risks and address human rights abuses where they have occurred. It helps businesses measure, understand, and communicate their human rights impacts, as well as set goals and manage change more effectively. Transparency on social, environmental, and governance practices helps inform the decisions of investors, consumers, communities, and civil society. In turn, it builds stronger stakeholder relationships, enhances corporate reputation, and opens access to new financial and business opportunities.

According to the OECD’s Global Corporate Sustainability Report 2025, 91% of all listed companies by market capitalisation disclosed sustainability-related information in 2024, up from 86% in 2022. Responsible investors have been encouraging increased transparency and reporting in relation to sustainability or ESG issues by investee companies. For example, the Corporate Human Rights Benchmark is an investor-backed initiative that assesses the world’s largest publicly traded companies on human rights indicators. The benchmark uses publicly available information from the assessed companies’ websites, their formal financial and non-financial reporting, and other public documents, as well as statements related to their policy commitments.

Reporting on human rights is one of the four steps of the human rights due diligence process, as outlined by the UN Guiding Principles on Business and Human Rights (UNGPs). The Commentary to Guiding Principle 21 states:

“The responsibility to respect human rights requires that business enterprises have in place policies and processes through which they can both know and show that they respect human rights in practice. … Formal reporting is itself evolving, from traditional annual reports and corporate responsibility/sustainability reports, to include online updates and integrated financial and non-financial reports. Formal reporting by enterprises is expected where risks of severe human rights impacts exist, whether this is due to the nature of the business operations or operating contexts. The reporting should cover topics and indicators concerning how enterprises identify and address adverse impacts on human rights …”

A range of materials has been developed to assist in sustainability reporting:

The UN Guiding Principles Reporting Framework, developed by Shift and Mazars, is a tool to assist businesses in reporting on how they respect human rights.
The GRI Sustainability Reporting Standards (GRI Standards) provide a framework for businesses to report on the broad spectrum of sustainability issues. An overall update of GRI’s Universal Standards brought about significant alignment between the reporting approach and the UNGPs.

Increasingly, sustainability reporting is moving from being a voluntary element of Corporate Social Responsibility (CSR) to becoming a legal requirement in various jurisdictions. The OECD’s Global Corporate Sustainability Report 2025 suggests that standard-setters strengthen interoperability among sustainability-related disclosure frameworks.

Ensuring transparency and reliable data on business operations and their impacts on people and the planet is vital for sustainable development. As highlighted by the UN Global Compact, there has been a proliferation of voluntary and mandatory standards requiring companies to disclose sustainability and ESG-related information. As reported by the Institute of Sustainability Studies, sustainability reporting can help businesses enhance their brand reputation and trust, gain competitive advantage and attract talents, build long-term relationships between investors and stakeholders, and open new markets and opportunities.

As an example, the California Transparency in Supply Chains Act of 2010 requires all retailers and manufacturers conducting business in the state and whose annual worldwide gross is US$100 million, to disclose information regarding their efforts to eradicate human trafficking and slavery within their supply chains on their website or through written disclosures.

With a similar approach, in 2015, the UK adopted the Modern Slavery Act, requiring businesses over a certain size (the regulation has set this as businesses having a total turnover of over £36 million) to prepare a slavery and human trafficking statement for each financial year of the organisation. The UK Government launched a central registry of modern slavery statements in 2021. In July 2018, the UK Government commissioned an independent review of the Modern Slavery Act 2015. The final review report in 2019 highlighted that the UK Modern Slavery Act contributed to greater awareness of modern slavery in companies’ supply chains, and sanctions for non-compliance for companies should be strengthened.

The Australian Parliament passed the Commonwealth Modern Slavery Act in November 2018, which came into force on 1 January 2019. It requires entities to make annual public reports on their actions to address modern slavery risks in their operations and supply chains. The Act applies to businesses with a yearly revenue of AU$100 million that operate in Australia, as well as to government bodies. At the state level, New South Wales passed a Modern Slavery Act in July 2018, which is more stringent than the federal bill. The NSW Act applies to companies with an annual turnover of AU$50 million. It creates monetary penalties for companies with employees in New South Wales that fail to comply with the modern slavery statement requirements (See the Issue page on Forced labour & modern slavery for more information).

In 2019, the EU adopted the Sustainable Finance Disclosure Regulation (SFDR), which aims to strengthen disclosures in the financial services sector regarding investments promoted as having sustainability as an objective or ESG characteristics. The SFDR refers to sustainability factors defined as “environmental, social and employee matters, respect for human rights, anti-corruption and antibribery matters.” The regulation requires Financial Market Participants, such as asset managers, pension funds, insurance companies, and financial advisers, to publish information on their websites about their policies regarding the integration of sustainability risks in their investment decision‐making process, as well as in their investment advice or insurance advice. They are also required to publish “information on how they consider the negative externalities of their business models, namely the principal adverse impacts of investment decisions or financial advice on ESG sustainability; or information explaining why they consider there to be no such negative impact.”

In December 2022, the EU adopted the EU Corporate Sustainability Reporting Directive (CSRD). The CSRD outlines sustainability reporting requirements for companies across ESG issue areas. Approximately 50,000 companies are covered by the CSRD. This includes large listed and non-listed EU companies, listed EU SMEs of a certain size, as well as third country companies with activities in the EU above certain thresholds. The CSRD builds on and amends the previous EU Directive on non-financial reporting (NFRD).

The CSRD requires covered companies to include in their annual management reports “information necessary to understand the undertaking’s impacts on sustainability matters, and information necessary to understand how sustainability matters affect the undertaking’s development, performance and position” (CSRD, Article 19a). This is commonly referred to as ‘double materiality’. It also specifies the reporting topics as they relate to ESG issue areas (CSRD, Article 29b).

The CSRD is complemented by delegated acts, including one that introduces comprehensive sector agnostic European Sustainability Reporting Requirements (ESRS). The standards are developed in a draft form by the EFRAG, previously known as the European Financial Reporting Advisory Group, an independent body bringing together various stakeholders. The ESRS draw significantly on key international instruments on responsible business conduct, including the UNGPs and the OECD Guidelines for Multinational Enterprises, and contains granular disclosure requirements. In relation to social sustainability, these requirements are split by affected stakeholder groups in so-called ESRS S1-S4: workers, workers in value chains, affected communities, and end-users & consumers. In addition to the already adopted ESRS, sector-specific delegated acts are to be adopted as is a delegated act defining reporting standards for non-EU companies.

Importantly, the CSRD also establishes rules concerning assurance of sustainability reporting. These aim to significantly improve the quality of companies’ sustainability reporting. In the first instance, it introduces a requirement for limited assurance with the aim of moving to reasonable assurance in the longer term. These provisions are to be complemented by delegated acts outlining EU-wide assurance standards. Finally, the Directive requires sustainability reporting in a digital machine-readable format the creation of a European single access point (ESAP) for public corporate information.

In 2023, California adopted two major climate reporting laws: the Climate Corporate Data Accountability Act (SB 253) and the Climate Related Financial Risk Act (SB 261). SB 253 requires all United States companies with more than US$1 billion in yearly revenue that operate in California to disclose their Scope 1 and Scope 2 greenhouse gas emissions by June 30, 2026. They must also start reporting Scope 3 emissions in 2027 based on the previous year’s data. SB 261 requires companies with more than US$500 million in yearly revenue to publish a public report every two years on their climate-related financial risks and how they plan to manage them. Reporting begins on January 1, 2026, using data from 2025.

In 2023, Japan’s Financial Services Agency introduced mandatory sustainability disclosure requirements through amendments to the Financial Instruments and Exchange Act. The reform applies to all listed entities, including foreign companies listed in Japan, covering approximately 4,000 firms. The revised framework requires companies to establish a dedicated sustainability information section within their annual securities report. Disclosures must align with the four thematic pillars: Strategy, Metrics and Targets, Governance and Risk Management. In March 2025, the Sustainability Standards Board of Japan released a set of national sustainability disclosure standards by incorporating key elements of the Sustainability Disclosure Standards published by the International Sustainability Standards Board.

Financial market regulators and stock exchanges across the world have issued guidance and/or requirements to listed companies on sustainability reporting. An example is the Nasdaq ESG Reporting Guide 2.0 (2019), which requires every listed issuer to prepare an annual sustainability report on a “comply or explain” basis following the adoption of internationally accepted reporting frameworks. The Sustainable Stock Exchanges (SSE) Initiative highlights a range of further instruments.

A range of materials has been developed to assist in sustainability reporting:

The International Sustainability Standards Boardhave been developing global reporting standards on sustainability.
TheUN Global Compact Communication on Progress.
The Global Reporting Initiative has published ‘Strengthening business accountability in the National Action Plans on Business and Human Rights: Policy recommendations on transparency (November 2019)‘.
The Disability Hub published an updated version of the Disability in Sustainability Reportingguide in 2021 by aligning disability reporting with the GRI Universal Standards.
In 2024, the Social & Labor Convergence program published new Guidance on the EU Corporate Sustainability Reporting Directive (CSRD).
In 2023, Shift published a series of guidance to help understand the practical implications of
The Danish Institute for Human Rights published a report analysing the interaction between the EU’s sustainability and business and human rights instruments, including the CSRD and SFDR.

Sustainability reporting is a key mechanism for turning the 2030 Sustainable Development Goals into measurable progress. By requiring companies to disclose their environmental and social impacts in a structured manner, sustainability reporting creates transparency and accountability. This visibility drives competition and visibility toward better performance on SDG 5 on gender equality, SDG 8 on decent work, SDG 12 on responsible production, and SDG 13 on climate action, along with other SDGs. It also enables governments to track contributions from the private sector and align national strategies with global objectives.

One of the most significant barriers to tracking progress toward the SDGs is the lack of data & disaggregated data. According to the UN’s 2023 SDG Progress Report, geographic coverage, timeliness, and disaggregation remain areas of concern. The report highlights that for several cross-cutting goals, such as climate action (Goal 13) and gender equality (Goal 5), less than half of the 193 countries or areas have internationally comparable data since 2015. The report highlights the importance of involving a wide range of stakeholders to strengthen data monitoring efforts for achieving the SDGs. The UN’s Gender Snapshot report 2024 highlights that countries are, on average, only halfway through planning, producing, and making gender data available. Similarly, the UN’s 2025 SDG Progress Report underlines the importance of adequate data structures and systems for measuring, monitoring, and responding to the global development needs. It reiterates the urgent need for building sustainable financing and resilient data systems. Businesses can help fill some of these gaps through their reporting on relevant issues. In 2021, the GRI and UN Global Compact published ‘Integrating the SDGs in corporate reporting: A practical guide’. (See the Issue page on the Sustainable Development).

12) Responsible Consumption and Production

References

The UN Guiding Principles on Business and Human Rights.
The California Transparency in Supply Chains Act of 2010.
UK Modern Slavery Act 2015.
The Modern Slavery Act 2015 (Transparency in Supply Chains) Regulations 2015.
The UK Government, Modern slavery statement registry.
Independent Review of the Modern Slavery Act 2015: Final Report.
Independent review of the Modern Slavery Act: final report.
EU Sustainable Finance Disclosure Regulation.
Australian Commonwealth Modern Slavery Act.
Mondaq, Modern slavery laws – Impacts for the NSW Government.
BHRRC, Australia: Modern Slavery bill passed by New South Wales state Parliament.
EU Corporate Sustainability Reporting Directive.
EU Directive on non-financial reporting (NFRD).
European Sustainability Reporting Requirements.
California Climate Corporate Data Accountability Act (SB 253).
California Climate Related Financial Risk Act (SB 261).
IFRS, Jurisdictional Snapshot: Japan.
ESG Reporting, Japan Releases Inaugural IFRS-Aligned Sustainability Reporting Standards.
Nasdaq ESG Reporting Guide 2.0(2019).
Sustainable Stock Exchanges (SSE) Initiative.
Corporate Human Rights Benchmark.
The UN Guiding Principles Reporting Framework.
GRI Sustainability Reporting Standards (GRI Standards).
International Sustainability Standards Board.
TheUN Global Compact Communication on Progress.
The Global Reporting Initiative, ‘Strengthening business accountability in the National Action Plans on Business and Human Rights: Policy recommendations on transparency,’ (November 2019).
The Disability Hub, Disability in Sustainability Reporting, (2021).
Social & Labor Convergence program, Guidance on the EU Corporate Sustainability Reporting Directive (CSRD), (2024)
Shift, A series of guidance to help understand the practical implications of ESRS.
The Danish Institute for Human Rights, How do the pieces fit in the puzzle? Making sense of EU regulatory initiatives related to business and human rights, (2024).
GRI, Strengthening business accountability in the National Action Plans on Business and Human Rights: Policy recommendations on transparency.
UN, The Sustainable Development Goals Report 2023.
UN, Progress on the Sustainable Development Goals: Gender Snapshot Report 2024.
UN, The Sustainable Development Goals Report 2025.
GRI and UN Global Compact ‘Integrating the SDGs in corporate reporting: A practical guide’, (2021).

What National Action Plans say on Sustainability Reporting

Belgium (2017 - open)

Action point 15

Incorporate the principle of “due diligence” into the management of the company, also in the terms of human rights

Intégrer le principe de « diligence raisonnable » au sein des organismes de gestion de l’entreprise, également en matière de droits de l’Homme

This action point focuses on due diligence. The NAP explains that “the OECD, and the EU, wants to make more non-financial information available. In this context, companies are encouraged to make public their policy on corporate ethics, social affairs, human rights, including, where applicable, in their supply chains, the human rights risks identified, their action plans to prevent any negative impacts and to remedy if necessary, and the measured impact of these action plans.” Alongside the federal government, the Wallonia, Flemish and Brussels governments are committed to encouraging the publication of non-financial reporting by large companies.

Action point 16

Promote social reporting, including human rights

Promouvoir les rapports sociétaux, droits de l’Homme inclus

This is the main action point covering the issue of non-financial reporting. The NAP explains that given the adoption of the new EU directive 2014/95/EU, some major companies will be required to disclose non-financial information in their annual report relating to the environmental, social and human resource issues, respect for human rights and the fight against corruption and bribery. Companies that meet the conditions for making such a non-financial statement but that do not have a policy on one or more of the above-mentioned issues will be required to provide a clear and reasoned explanation of the reasons for this choice and to include it in this non-financial reporting.

Belgium’s actions will include:

Firm transposition of the directive 2014/95/EU so that it is quickly and clearly established what is expected from companies as part of the non-financial reporting.
Consult with stakeholders on this issue. In collaboration with employers’ organizations, clear communication will be put in place to inform large companies about the new obligations that will enter into force from 2017 onwards.
Insist within the European Commission on support measures, for large enterprises that are obliged to publish reports on this issue, as well as for small and medium-sized enterprises and other organizations that wish to do so on a voluntary basis.
Regarding reporting by public services, the federal public services will have to draw up a social report every second year, with the objective of cross-cutting sustainable development in management of contracts. This report should be prepared in accordance with the guidelines of the Global Reporting Initiative. The reports will be published, inter alia, through the website: http://www.rs.belgium.be/en/

Pillar 1: The State Duty to Protect Human Rights

Strand 8: Legislation, Policies and Incentives

Action Point 8.1. (page 60)

The Ministry of Economy will support the legal provision committed in the Agenda for Productivity, Innovation and Growth seeking to create a legal framework for social business enterprises, by encouraging the incorporation of business and human rights criteria.

Strand 9: State Business Enterprises

Action Point 9.3 (page 62)

To strengthen coordination between the Ministries forming part of the Inter-Ministerial Working Group, amplify the impact of this Action Plan, and make known its progress, the Group will carry out the following actions: …

2. Encourage the adoption of policies, statements or codes of conduct by business enterprises and urge the implementation of mechanisms of due diligence.

Pillar 2: The Corporate Responsibility to Respect Human Rights

Strand 3: Reports on Human Rights Issues

Action Point 3.1 (page 74)

The Ministry of Economy will:

Promote, through the Division of Associativity and Social Economy, strategies and mechanisms of accountability and non-financial reporting for cooperatives, which will include the potential risks of their businesses on human rights. To encourage the use of this practice, an electronic template will be developed in 2017, free of charge and freely available, for these bodies to report to the State and their different target audiences.

VIII. FUNDAMENTAL PILLARS

i. Fundamental Pillar 1: The State’s obligation to protect human rights

Strand 9 [Eje nº 9]: The state as economic actor

(…)

The Ministry of Finance and Public Credit will adopt commitments to respect human rights and good reporting practices (GRI methodology) to monitor company performance.

Non-financial reporting [page 21-22]

“Implements Principle 3d

Reporting on the activities of large companies works to the benefit not only of business partners and shareholders, but also other stakeholders. With this in mind, companies are increasingly reporting not only on their financial position, but so on the non-financial aspects of their operations. Information on the impacts that companies’ operations have on the environment, social aspects, human rights and the protection thereof is disclosed in separate non-financial reports or as part of the annual report.

Many companies already engage in non-financial reporting entirely voluntarily because this is regarded as a matter of prestige and an opportunity to improve their market position. Nevertheless, the European Union, having decided to coordinate non-financial information, has issued a Non-financial Reporting Directive. [Directive 2014/95/EU of the European Parliament and of the Council of 22 October 2014 amending Directive 2013/34/EU as regards disclosure of non-financial and diversity information by certain large undertakings and groups.]

The non-financial reports drawn up by certain large entities could become an important tool for transparency. The auditor examines whether an entity has drawn up non-financial information and disclosed it in the annual report or consolidated annual report, or whether it has produced a separate report. As non-financial reporting shoulders entities with a heavier administrative burden and extra costs, it is not compulsory for smaller entities, who will be able to decide for themselves whether or not to publish a non-financial report.

Current state of play:

The Czech Republic has transposed the Non-financial Reporting Directive into Act No 563/1991 on accounting (in particular Part Eight thereof). Non-financial information will be disclosed by large public-interest entities with more than 500 employees. Information on respect for human rights will be a mandatory part of the report.
The European Commission (DG FISMA [Directorate‑General for Financial Stability, Financial Services and Capital Markets Union]) has produced general guidelines for businesses on how to apply the Non-financial Reporting Directive.

Tasks:

Publish the European Commission’s general guidelines on the websites of the National CSR Portal, the Ministry of Industry and Trade and the Ministry of Finance, and in Finanční zpravodaj (“Financial Bulletin”).
Coordinator: Ministry for Human Rights, Ministry of Industry and Trade, Ministry of Finance
Deadline: 31 December 2017
Provide information on the guidelines as part of training courses or in guidance and informational materials on non-financial reporting.
Coordinator: Ministry of Finance
Deadline: Running”

Transparency [page 37-38]

“The Guiding Principles set great store by openness and transparency, which in practice means communication with the public, with employees and with other stakeholders. Businesses should make public the fact that they are mindful of their responsibility, that they are not just assuming this responsibility for show, and that they accept it as part of their business ethics. This ongoing communication could include not only the public, but also investors, business partners and potential employees, for whom the business, by following this path, has become a more attractive partner or place to work. Communication may be one way (e.g. various forms of non-financial reporting) or bidirectional (e.g. public hearings on matters of general interest).

The Government of the Czech Republic recommends that businesses where the activities, products, services or business relationships are associated with risks of serious human rights violations formally provide information on how they are dealing with those risks, even in situations where the law does not require them to do so. The government recommends all companies reporting on human rights to take account of the Reporting Framework for the UN Guiding Principles on Business and Human Rights. Reporting should provide information of relevance without overwhelming the reader. The Government also recommends that large-scale projects with a potential major impact be publicly presented and consulted.”

Voluntary non-financial reporting [page 38-39]

“In the European Union, large companies are required to publish certain non-financial information, including information on human rights matters. Small businesses, however, may report voluntarily, especially if they are active in sectors or in countries where there is a heightened risk of encroachment on human rights. Transparency is highly self-regulatory and makes it easier to appoint a responsible person in complex corporate structures. It enables a business to evaluate and map out risks, while making it clear to the public that the company does not underestimate them.

What should be included in a report? Human rights standards, as opposed to financial reporting, which is governed by sophisticated and internationally reputed respected standards, are still inchoate. Even so, the following information should not be left out of a report:

Whether a human rights commitment has been made, how it has been devised, whose rights it affects, how it is communicated, and whether and how responsibility for compliance is addressed within the business.
A specification of key issues, i.e. areas viewed by the company as operationally risky, or in which it is most involved. Information about how such issues have been identified and, if the company has operations in multiple countries, information as to which countries are affected.
Information on how these risks are addressed and what measures have been taken.
Significant events that have occurred in the past year.

A business may publish periodic non-financial reports in numerous forms, either as part of the annual report or entirely separately. In any case, they should be posted online on the business’s website. The non-financial report should not be drawn up just for show, but should shed light on significant information relevant to an impact assessment of the business’s operations. On the other hand, it should remain brief and concentrate on matters of relevance. Parent companies should include information on the activities of their subsidiaries.

Human rights commitments cannot always be assessed with precision. Businesses should retain the option of evaluating commitments according to their own internal schemes and criteria. Nevertheless, where possible standardised indicators, including historical developments, should be used. The application of internationally acknowledged standards for non-financial reporting is recommended. These include:

Non-financial reporting standards based on the Guiding Principles on Business and Human Rights
Global Reporting Initiative, an independent international organisation specialising in the reporting of the impacts of business operations in the fields of human rights, the environment and corruption
Integrated Reporting (IR)”

2. The state duty to protect human rights

2.2 Recommendations from the Council for CSR on the state duty to protect [page 10]

“In November 2011, the Danish Council for CSR started working on recommendations to the Government on how the UNGPs on the state duty to protect could be implemented. The council finished its work in January 2012 where the recommendations were handed over to the Government. Among other initiatives, the Council for CSR recommended that the Danish Government:
– Expands the existing Danish corporate non-financial reporting requirement to include mandatory reporting on human rights; …”

2.3 Actions taken

Companies owned or controlled by the state [page 13]

“In 2008 the Danish Government introduced a statutory CSR reporting requirement which obligates all state-owned public limited companies irrespective of their sizes to report on CSR in the management’s review in their annual reports (GP 4)…”

Reporting requirement on human rights impact [page 14]

“Another priority for the Danish Government has been to strengthen the existing legal reporting requirement for the largest Danish companies and all state-owned companies (GP 3d).

Since 2009, large companies including all state-owned companies and institutional investors in Denmark have been required to report on their work on corporate social responsibility. This means that while Danish businesses are free to choose whether or not they wish to have a CSR policy there is a statutory requirement that they must take a position on CSR in their annual reports.

If the company has a CSR policy, the company must account for this policy in their annual reports, including any CSR standards, guidelines or principles the company employs. Secondly, the company must report how these policies are translated into action, including any systems or procedures used. Thirdly, the company must evaluate what has been achieved through the CSR initiatives during the financial year, and any expectations it has regarding future initiatives. If the company does not have any social responsibility policies, this must be reported.

In June 2012, this reporting requirement was expanded so that the largest Danish companies from 2013 expressly must state in their reports what measures they are taking to respect human rights and to reduce their impact on the climate. This means that if a company has a policy on human rights or climate issues, it must report according to the existing structure; what is the policy, how has the policy been translated into action and what has been achieved through the initiatives. If the company does not have policies for human rights or climate issues, this must also be disclosed. The purpose is to further strengthen Danish companies’ activities in relation to human rights and climate change which will be beneficial to society overall, but also to the individual company.

Three years after the reporting requirement was introduced, analyses show that companies generally appear to have been encouraged to report on CSR. In the course of the first three years of the legal requirement’s existence, nearly 50% of the companies reported on CSR for the first time. Secondly, there have been significant improvements in reporting practices in a number of areas. There is, nevertheless, still room for improvement as regards reporting consistency and reporting on the results of the CSR work. For information on Danish companies reporting on human rights see section 3.3.”

3. The corporate responsibility to respect human rights

3.3 Actions taken

Evaluation of CSR reporting in large and listed Danish companies [page 18]

“In 2008, Danish Government introduced a legal requirement for large companies in the Danish Financial Statements Act (see section 2.3 page 6 for more on the reporting requirement). Since the statutory CSR reporting was introduced a survey on the effects of the legal requirement has been conducted in three consecutive years. The surveys were based on a rolling group of participants, meaning that the same group of companies has been surveyed the previous years. Since the group has been subject to the reporting requirement for three years it includes – in the last survey – very few companies reporting for the first time. As expected, there have also been few changes in the choice of topics and content in the reports.

In the financial year 2010, a significant increase in the number of companies reporting actions relating to human rights (38% compared to 16% in 2009) and labour rights (35% compared to 16% in 2009) was noted. In the 2011 financial year, these reporting topics were as common as in 2010. Due to recent developments in international CSR principles (in particular the development of the UN Guiding Principles on Business and Human Rights), an increased focus on human rights, in particular, can be expected in the future. Following the latest amendment of Section 99a of the Danish Financial Statements Act, companies thus have to report on the topics of human rights and climate with effect from the 2013 financial year.”

Award for Best Non-financial Report [page 19]

“The Danish trade organization of auditing, accounting, tax and corporate finance, “FSR – Danish Auditors” annually announces the company with the best CSR report both for large companies and SMEs. The reports are judged by a panel of selected representatives from Danish businesses, organization, financial sector, educational institutions, etc. As part of the evaluation the judges look at whether companies also report on difficult subjects such as adverse human rights impacts.”

Further on, in the section Recommendations from the Council for CSR on the State Duty to Protect [page 10], the NAP states:

“Among other initiatives, the Council for CSR recommended that the Danish Government:

Expands the existing Danish corporate non-financial reporting requirement to include mandatory reporting on human rights.”

Appendix 1, GP 3d

Status in Denmark (initiatives implemented before the UN ratification of the Guiding Principles) [page 27]

“Mandatory CSR reporting

As part of the first national action plan for CSR, the Danish Government introduced a reporting requirement to ensure that major businesses, institutional investors and unit trusts report on their CSR work in the management review of the annual reports. The duty to report for major businesses, institutional investors and unit trusts has entailed an obligation to report on their CSR policies and how they implement the policies in practice. Businesses and investors must also report if they have yet to set up policies for the area. This fact must appear from the management review of the businesses’ annual reports.”

Initiatives taken or planned as a dedicated measure to implement the UNGPs (after the UN ratification of the Guiding Principles) [page 27]

“Reporting on human rights and climate

From 2013 the 1,100 largest Danish companies and all state-owned limited liability companies must report on CSR in their annual reports. The Government will introduce a bill proposing that the largest Danish companies and state-owned limited liability companies in future must expressly state in their reports what measures they are taking to respect human rights and reduce their impact on the climate.”

Appendix 1, GP 10 continued

Initiatives taken or planned as a dedicated measure to implement the UNGPs (after the UN ratification of the Guiding Principles) [page 32]

“The Government has pro-actively supported the European Commission’s proposal for an EU Directive as regards disclosure of non-financial and diversity information. The Danish government finds that the expected European regulation is a timely opportunity for Europe and European companies to further strengthening reporting practices with regard to human rights. In addition it sends an important signal globally that while transparency is important in itself, a leveling playing field is needed.”

1 The state obligation to protect human rights

1.3 Activities in the EU [page 16-17]

NON-FINANCIAL REPORTING

“On 18 April 2013, the European Commission made a proposal to amend the accounting directive for the disclosure of so-called non-financial information of certain large companies.

The proposal shall be applied to companies of significant public interest with more than 500 employees on average on the account closing date. According to the proposal, such companies should include in their annual report a declaration stating material data related to the environment, social affairs, employees, human rights, and the prevention of corruption and bribery. The declaration should contain a short description of the business model, a description of the policies related to the areas mentioned above as well as the due diligence related to them, the results obtained in the policies, the main risks and risk management that apply as related to the areas mentioned above, and the non-financial performance indicators significant for company business. Instead of a declaration attached to the annual report, companies may also publish separate reports on certain conditions.

In February 2014, the negotiations between the Commission and the Parliament reached an agreement on the proposal, and the proposal is likely to be submitted to Parliament in April. After this, it will also be approved by the Council of the European Union. The proposal is due for approval before the end of the parliamentary term in May 2014. If the proposal is approved, it must enter into force in Finland in 2016. In this case, it is estimated that the reporting obligation would apply to the financial year 2017 at the earliest. On a national level, Finland will initiate the preparations to implement the directive as soon as possible.”

2 The state and companies

2.1 The state as an economic operator [page 22]

CORPORATE GOVERNANCE

“The Ownership Steering Department in the Prime Minister’s Office has set a CSR reporting requirement for unlisted companies that are either majority-owned by the state or entirely state-owned. This also includes human rights. The obligation requires that companies submit reports in accordance with the best practices in the branch of activity concerned and, at minimum, adopting the standards corresponding to those of their central competitors.

As an owner, the state expects that the administration and management of state-owned companies take human rights into consideration in a responsible and transparent manner, both in their own organisation and in their subcontracting chains. (…)”

3 Expectations towards companies and support services

3.2 Reporting on corporate social responsibility [page 26]

“Reporting on corporate social responsibility may be a significant factor in monitoring the human rights impacts and risks of companies. In the Resolution on Corporate Social Responsibility, the Finnish Government encourages companies to publish the non-financial data on the social and environmental impact of their activities. The Ministry of Employment and the Economy and the Ministry of the Environment are involved in organising the annual competition for reporting on corporate social responsibility. The competitions have been organised since 1996 with a view to encourage companies to report on CSR. When reporting becomes mandatory for some of the companies (cf. Section 1.3 on non-financial reporting), the question of reforming the competition must be addressed.

International information on the content of companies’ responsibility reports is available in a database maintained by the Global Reporting Initiative (GRI). In Finland, Corporate Responsibility Network FIBS acts as a partner for GRI for all Finnish companies and organisations to register their responsibility reports in the database. By means of the database, companies’ responsibility reports can be compared by branch of activity and by geographical area. The database also provides useful information concerning the international corporate social responsibility standard to which each report refers.

As a follow-up measure, the working group proposes that

human rights be adopted as the annual theme of the reporting competition.
Principal responsible party: Ministry of Employment and the Economy, schedule before the end of 2015.”

I- The State’s Obligation to Protect Human Rights

The International Framework [page 13]

… France also chairs the Group of Friends of Paragraph 47 of the Rio+20 Declaration. This group promotes sustainable development reporting to better ensure that economic actors respect social, environmental, good governance and human rights standards. This group successfully advocated for reporting to be reinforced and extended to all SDGs. …

Actions Underway [page 16]

Working with the Group of Friends of Paragraph 47 of the Rio+20 Declaration, France supports the reinforcement of reporting requirements in the environmental, social and governance fields, especially with respect to the implementation of the Sustainable Development Goals adopted on 25 September 2015.

The European Framework

7. The European Union (EU) [page 17]

France has played an important role in ensuring that these issues are high on the European agenda, particularly with respect to the adoption of the European directive on binding non-financial reporting, which France actively supported during negotiations. It also promoted the inclusion of social, environmental and governance standards in trade and investment agreements (see section 8 below). It helped to ensure that the conclusions of the Council of the EU under the Dutch Presidency were adopted, supporting the enforcement of the UN Guiding Principles on Business and Human Rights and their integration into development policy. …

Footnote: See Directive 2014/95/EU of the European Parliament and of the Council of 22 October 2014 amending Directive 2013/34/EU as regards disclosure of non-financial and diversity information by certain large undertakings and groups, OJ L 330 of 15 November 2014.

Actions Underway

France has made human rights a requirement in non-financial reporting following the transposition of European Directive 2014/95/EU of the European Parliament and of the Council of 22 October 2014 amending Directive 2013/34/EU as regards disclosure of non-financial and diversity information by certain large undertakings and groups.

The National Framework

10. The Reinforcement of Legislation [page 23]

Recent public policies have led France to adopt new legislative measures supporting CSR.

… France also played a key role in developing transparency obligations for companies at the European level. It was the main supporter of the draft directive on non-financial reporting obligations, published on 22 October 2014, which requires large European listed companies to publish reports on their social, environmental, human rights and corruption policies. France encouraged the European Commission to take an ambitious approach when adopting the guidelines discussed in the directive. The directive is currently in the final stages of being transposed into French law. This will reinforce existing non-financial reporting requirements for companies. …

13. The Role of Public Agencies

Actions to be Implemented [page 30]

Make the [Agence Française de Développement] AFD funding for businesses conditional on implementing or undertaking to implement non-financial reporting and a CSR due diligence plan for projects, or on the enforcement of host country or international standards.

…

15. Economic Sectors and Human Rights

The Financial Sector [page 35]

… One of the instruments France has implemented for businesses is increased transparency by way of non-financial reporting requirements.

There have been a number of voluntary international initiatives by the financial sector to promote human rights (the Equator Principles, UNEP Finance Initiative, the development of Socially Responsible Investment, and the Global Compact). However, France has implemented a regulatory framework that is relatively unique in that some of its provisions specifically target this sector (the Grenelle II Act of 12 July 2010).

Actions Underway [page 36]

… France is examining whether to extend environmental, social and governance reporting requirements for institutional investors in Europe to cover human rights.

II- Businesses’ Responsibility to Respect Human Rights

Introduction

In March 2015, the National CSR Platform agreed on the following points with respect to due diligence [page 38]

… Defining the operational content of reasonable due diligence processes for companies in due diligence plans. These plans would distinguish between subsidiaries and subcontractors given the different due diligence processes applicable to each of these cases. The goal of these plans would be to identify and prevent human rights and environmental risks resulting from business operations. The French NCP’s work on the textile and garment sector could be a useful reference. Parent companies and outsourcing companies would have to disclose the due diligence processes they implement, in compliance with the European directive on non-financial reporting.

1. Charters and Codes of Conduct

Existing Tools [page 39]

The Human Rights Reporting and Assurance Frameworks Initiative (RAFI);

…

6. Reporting [page 44]

Businesses must monitor the human rights measures they adopt and disclose on their initiatives in this field.

Under European Directive 2014/95/EU, human rights will become one of the pillars of CSR. This position will be reflected in French reporting requirements when the directive is transposed into national law. It should be noted that human rights reporting is already a requirement under the regulatory provisions of the Commercial Code. Decree 2012-557 of 24 April 2012 on the social and environmental transparency obligations of businesses places human rights on an equal footing with other issues.

Actions Underway

France is continuing to implement monitoring indicators and communicate with external stakeholders on business commitments and enforcement under the UN Guiding Principles on Business and Human Rights.

Actions to be Implemented

Implement provisions to help transpose the European Directive on non-financial reporting into French law.

The performance of measures adopted by businesses to respect and communicate on human rights can be monitored in the following ways:

By using existing global and sector-specific indicators or new company-specific indicators, and by formalizing internal annual reporting systems for the actions implemented;
By including points to be checked in existing internal supervisory mechanisms;
By monitoring and addressing human rights incidents;
By issuing annual reports that can be viewed by the public.

Existing Tools and Responsible Practices [page 45]

… The Global Reporting Initiative (GRI) has published G4 guidelines for sustainability reporting.
Shift and Mazars have developed the UN Guiding Principles Reporting Framework for companies to report on human rights. …

III. Federal Government expectations regarding corporate due diligence in respecting human rights

Reporting [page 9]

“Enterprises should keep information at their disposal and communicate it, where appropriate, to external recipients in order to demonstrate that they are aware of the actual and potential impact of their corporate activity on human rights and are taking appropriate steps to address the situation. The form in which this information is communicated should be tailored to its recipients. Enterprises whose business activity poses a particularly high risk of adverse impacts should issue regular public reports on that subject. Such reporting may be done in the framework of the company’s existing reporting format or take the form of separate reports focused on human rights. At the same time, such reporting obligations should not impose disproportionate administrative burdens on the reporting companies or on the SMEs in their supply chains.”

IV. Key areas for action

1.4 Enterprises in public ownership [page 18-19]

The Current situation

“The annual report on federal holdings lists about 700 enterprises in which the Federal Government has a direct or indirect stake. The Federal Government has direct holdings in 60 companies with business activities (as of 31 December 2014), 41 of these being direct majority holdings. Of the companies in which a direct majority stake is held, 13 have more than 500 employees. Among the matters covered by the report on federal holdings are the implementation of the Public Corporate Governance Code of the Federation, gender equality and the general sustainability of the listed enterprises.”

Measures

“The Federal Government is keen to increase the percentage of enterprises in which it holds a majority share that apply the German Sustainability Code, including its obligation to report on human rights. From the 2018 financial year, the report on federal holdings will list, in its chapter on sustainability, all internationally active enterprises with more than 500 employees in which the Federal Government has a majority shareholding that apply the German Sustainability Code or a comparable framework with compulsory reporting on human rights and those that do not.”

2.1 Ensuring the protection of human rights in supply and value chains

The current situation [page 20]

“The Partnership for Sustainable Textiles, which was initiated by the Federal Ministry for Economic Cooperation and Development, has established an obligation to comply with sustainability standards and to guarantee corporate due diligence in the textile and clothing sector. All members of the Partnership are required to pursue its social and environmental objectives. They submit to a review process, which is conducted by an independent third party and is designed to bring about continuous improvement. Individual schedules of measures (road maps) are compiled annually by all members; the first of these is to be produced by the end of January 2017. A robust sanctions regime and regular reporting on the implementation of the road maps will ensure credibility and transparency. The Textile Partnership creates a reference framework and an independent review system of international scope.”

2.2 Transparency and communication regarding corporate impacts on human rights [page 21]

“Transparency requirements for corporate activity are an elementary component of due diligence with regard to human rights. These requirements are not limited to formal sustainability reporting but also entail willingness to engage in open dialogue with consumers, customers and actual or potential stakeholders and to share information on request.”

The current situation

“The number of enterprises that already present regular sustainability reports on a voluntary basis is steadily increasing. For example, the participants in the Global Compact, more than 300 in number, have committed themselves to presenting annual reports. The reports from German enterprises, and particularly from the large enterprises, are mostly based on the voluntary standards of the Global Reporting Initiative (GRI). The Federal Government has also supported the development of a German reporting standard in the German Sustainability Code (DNK). Sponsored by the Federal Ministry of Labour and Social Affairs, the Institute for Ecological Economy Research (IÖW) assesses the quality of sustainability reports from large enterprises and SMEs and draws up a league table for each of these categories. This ranking is intended to stimulate corporate competition in the realm of sustainability reporting and to highlight and propagate benchmarks for high-quality reporting. Through their purchasing decisions, consumers influence the supply of sustainably produced and delivered goods and services. Instruments such as the information platform www.siegelklarheit.de (sustainability standards comparison tool), initiated by the Federal Government, create transparency and help consumers to adopt sustainable purchasing habits.”

Measures

“On 21 September 2016, the Federal Cabinet adopted the law transposing into German law Directive 2014/95/EU of the European Parliament and of the Council of 22 October 2014 amending Directive 2013/34/EU as regards disclosure of non-financial information by certain large undertakings and groups (the CSR Directive).”

3. Available means of practical implementation support

Measures [page 23]

“I. Helpdesk and initial consultation

In cooperation with business networks, ‘practice days’ for SMEs are offered nationwide. These sessions provide support, information and exchanges with other enterprises on responsible supply chain management and high-quality sustainability reporting.”

Section 2: Current legislative and Regulatory Framework

Non-financial Reporting [page 15]

“The EU Directive on disclosure of non-financial and diversity information (2014/95/EU) 9 entered into force in December 2014. It requires certain companies known as ‘public interest entities’ to include a declaration in their annual management report containing information stating material data related to the environment, social affairs, human rights, and prevention of corruption. This Directive will shortly be transposed into Irish law.”

Section 3: Actions

II. Initial priorities for the Business and Human Rights Implementation Group [page 18-19]

“viii. Encourage business representative bodies to provide examples, templates and case studies to help support companies in their efforts to develop human rights focused policies and reporting initiatives.

x. Encourage engagement with human rights reporting standards, such as the UN Guiding Principles Reporting Framework, the Global Reporting Initiative or the Business Working Responsibly Mark.

Annex 1 – List of additional and ongoing actions to be carried out across Government

Domestic Framework [page 20]

“1. Transpose the EU directive on Disclosure of Non-financial and Diversity Information (2014/95/EU) into Irish law.”

III. Expectations towards business companies

“The renewed and dynamic entrepreneurial approach is based on corporate governance structures to overcoming short-term financial advantages for environmental, social and human sustainability in the medium and long term in the context of the European Union’s initiatives on the circular economy, biodiversity and sustainable financial growth. At the same time, corporate governance was consolidated through the implementation of Directive (EU) 2014/85 on non-financial reporting, so relevant today. Its revision is in pipeline with the challenges posed by the pandemic and mentioned in the Communications on the European Green Deal and on “Europe’s moment: Repair and Prepare for the Next Generation” for a business vision of the opportunities for economic recovery in the long term.” (p. 12)

IV. Italian ongoing activities and future commitments

Gender dimension

“Italy has domestically transposed Directive (EU) 2014/95 on non-financial reporting through Legislative Decree No. 254/2016 and, in this context, an important inspection and verification activity by CONSOB of non-financial reporting is being conducted. Its ultimate aim is to verify adequate and transparent information along the supply chain, and also on processes of Due Diligence and management of the risk of violation of human and labour rights along the supply chain.” (p. 34)

ANNEX 1 – Accountability Grid and Assessment Tools for the Implementation of the NAP

“16. Further promote an effective implementation of Legislative Decree No. 254/2016 implementing Directive (EU) 2014/95 on the disclosure of non-financial and diversity information by large companies and groups of companies, including through a benchmarking exercise carried out on a sample of companies and aimed at analyzing the effective inclusion of the human rights dimension in non-financial reports published by companies and supervised by CONSOB, including in relation to diversity and gender.” (p. 63)

“34. through new mechanisms of monitoring and recognition of business activities, provide for an analysis of the Due Diligence of public or state-controlled companies, including non-financial reporting” (p. 66)

“35. continuing the promotion and protection of human rights, with a proactive role of the Inter-ministerial Committee for Human Rights, in correlation with the priority lines introduced in the framework of the PNRR and the SNSVS, including – among others – issues such as anti-corruption, non-financial information disclosure , supply chain, environmental issues, decent work and non-discrimination in favour of competing companies in public calls for tender and within contracts stipulated with companies for the purchase of goods and services, with particular regard to (i) Italian companies operating abroad; (ii) Italian companies using foreign suppliers; (iii) foreign companies” (p. 66)”

ANNEX 2 – Summary of the results of the assessment concerning the implementation of the first PAN-BHR

“It has been deemed necessary to ensure the accompaniment of companies in their growth on issues such as social value and sustainability, for example by enlarging the number of companies that have voluntarily published non-financial information in their financial statements and encouraging them to adopt new communication approaches regarding ecological footprint of their products and production processes.” (p. 70)

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)

Planned measures:

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)

Guiding Principle 3

Measure 10

“In order to increase transparency, and the confidence of consumers and investors on Spanish companies, the Government will compile the reports that companies write voluntarily, in accordance with the Spanish Strategy for Corporate Social Responsibility, and the Article 39 of the Sustainable Economy Law. It will be encouraged that these take into account the impact of their activities on human rights, including the value chain, introducing a specific chapter for that purpose. Likewise, and in relation to the reports and reports mentioned in the article 35 2 a) of the Sustainable Economy Law, which binds state business corporations, and public business entities attached to the General State Administration, it will be promoted the inclusion of a section on human rights. In addition, the transposition of Directive 2014/95 / EU on disclosure of non-financial information and information about diversity by certain large companies and certain groups will be carried out.”

2 The corporate responsibility to respect human rights [page 14]

“In keeping with the UN Guiding Principles, businesses’ human rights efforts are expected to include the following main points: …

Reporting:

Be transparent, i.e. report on and communicate the risks and opportunities facing the company, as well as its impact on society, both favourable and adverse …

[Footnote: February 2015 saw the launch of the first comprehensive guidance for companies on human rights reporting in line with the UNGP: UN Guiding Principles Reporting Framework. Five international companies are ‘early adopters’ of the reporting framework: Ericsson, H&M, Nestlé, Newmont and Unilever.]

Annex: Measures taken [page 23-24]

The State as owner

“According to the government state ownership policy, state-owned companies are expected to set a good example, which means that they must seek to comply with international guidelines such as the UN Global Compact, the UN Guiding Principles on Business and Human Rights, and the OECD Guidelines for Multinational Enterprises. They must also be transparent and report in accordance with the Global Reporting Initiative (GRI). State-owned companies must also identify areas of CSR that are relevant to their business strategy and the board of directors must set strategic sustainability targets. The ownership policy applies in companies where the State is the majority owner; in other companies, where the State is part-owner, the State seeks to ensure that the ownership policy is followed, in dialogue with other owners.

Annex: Measures planned [page 27-29]

Regulations and legislation

“The EU has adopted a Directive amending the Accounting Directive on disclosure of non-financial and diversity information. Corporate disclosure of sustainability and diversity policy (Ministry Publications Series 2014:45) proposes that certain companies prepare a sustainability report providing information on, for example, respect for human rights and anti-corruption activities. It is also proposed that the corporate governance reports of certain listed companies disclose the diversity policy that applies to their board.”

How can the State support the business sector?

“The Government Offices is prepared to consider continued support to the Shift Project for its development of the Reporting and Assurance Frameworks Initiative (RAFI). Companies are encouraged to use the UNGP’s Reporting Framework developed by Shift and Mazars.”

Annex: Links [page 30]

“GRI 4: www.globalreporting.org

Guidance for companies to report on how they respect human rights in line with the UN Guiding Principles: UN Guiding Principles Reporting Framework: www.ungpreporting.org”

1. Background

Legal Framework in Switzerland and in the EU

Corporate Sustainability Reporting Directive (CSRD) The obligation for companies to prepare sustainable development reports took effect in the EU on 5 January 2023. This directive updates and strengthens the rules on the corporate and environmental information that companies must disclose. To ensure Swiss law remains aligned at the international level, on 26 June 2024 the Federal Council initiated a consultation on new provisions governing corporate reporting. In keeping with the standards in effect in EU member states, the proposed rules will require a larger number of companies to publish reports on the risks their activities pose with respect to the environment, human rights and corruption, as well as on the measures taken to counter these risks.

2.2 Updating the measures contained in the NAP 2020–2023

Measure 7: Reduction in human rights risks associated with gold extraction and trading

Starting on 1 January 2022, Swiss-based companies must comply with due diligence obligations as well as with reporting obligations if they import and process minerals and metals from conflict-affected areas (see Article 964j ff. of the Code of Obligations, and the DDTrO). The Federal Administration informs the private sector of the applicable legal provisions.

Measure 27: Promoting efforts to end all forms of child exploitation in supply chains

Since 1 January 2022, companies based in Switzerland have been required to comply with due diligence obligations as well as with reporting obligations if there is reasonable suspicion that the products or services they offer were produced or supplied with the involvement of child labour (see Article 964j ff.CO and DDTrO). The Federal Administration supports the implementation of these legal obligations by providing an analytical tool and cooperating with child labour-related platforms set up by international organisations

The 2024-27 National Action Plan is supplemental to the 2020-23 NAP. The 2020-2023 NAP explicitly addresses this issue.

Additional Information about the 2020-23 NAP can be found here.

ACTION POINTS PILLAR 1	Aim	Responsible party	Timeline
Due Diligence and CSRD
Negotiate the Corporate Sustainability Reporting Directive (CSRD)	National implementation of reporting obligations in line with the CSRD.	J&V, FIN	The Directive is expected to be adopted by EU legislators in 2022.