26. February 2020

Non-financial reporting: ASCG takes a constructive critical view of the EU Commission’s inception impact analysis

The ASCG has submitted to the European Commission (COM) its comments on the inception impact assessment of the proposed changes to the requirements on non-financial corporate reporting. The so-called Inception Impact Assessment of the COM marks – like a roadmap, e.g. in the Fitness Check on the EU corporate reporting framework – the public launch of such an initiative.

The ASCG critically assesses the COM’s explanatory statements and the policy options presented and makes some specific recommendations: before deciding on a political measure, any perceived shortcomings of the NFRD need to be assessed whether those deficiencies can indeed be addressed appropriately by any of the policy options.

The development of reporting standards should – if this is considered the appropriate means – be in the hands of those who are directly affected by information deficits and who provide information. The ASCG, on the other hand, considers public policy to have a clear responsibility to define the scope of the standards and to enforce the reporting quality.

The ASCG also takes a clear position against a European solution. The reporting requirements are primarily aimed at companies whose business activities are not limited to Europe. In this respect, the benefit of such a solution would be questionable and the risk of competitive disadvantages for companies based in Europe would not be appropriate.

In the meantime, the Commission has launched the consultation announced in the Inception Impact Assessment and published a comprehensive questionnaire (login required). This questionnaire is currently only available in English, further language versions have been announced. The deadline for feedback expires on 14 May 2020.

ASCG President Prof. Dr. Andreas Barckow commented as follows: “Our technical committees will take a close look at the questionnaire. I would like to encourage all companies and associations to participate in this consultation and invite them to cooperate with the ASCG. It is important that the German industry sends a clear signal to Brussels.”