The information needed to produce a powerfull Non-Financial Report
In accordance with the MPF Order No. 1938/2016 and the MPF Order No. 3456/2018, companies that are obliged to carry out annual non-financial reporting must publish information on environmental, social and employee maters, respect for human rights, anti-corruption and bribery matters. For each of these aspects, companies must include a series of information that will allow them to present and understand the performance level of the company regarding their management, such as: policies and procedures; the results of the respective policies and procedures; the risks that are related to the non-financial aspects and the way these risks are managed; key indicators of non-financial performance.
This information enables stakeholders to understand the impact that companies have on the economy, society and environment.
In order to allow Romanian companies to provide complete information on their non-financial performance, the legislation establishes the type of information that must be reported for each non-financial aspect.
WHAT ARE THE ENVIRONMENTAL INFORMATION WHICH CAN BE REPORTED?
Regarding the environmental aspects, a company, depending on its activities, can publish information on the use of renewable and non-renewable energy, greenhouse gas emissions, water use and air pollution or other relevant non-financial information. In this situation where the company’s activities have an impact on the environment, the company must include in the non-financial reporting details on this impact, current and foreseeable and, if applicable, on health and safety. Also, the non-financial reporting must contain information on the consequences on the climate change that the company’s activities have and those that derive from the use of its goods and services.
WHAT ARE THE SOCIAL AND EMPLOYEE INFORMATION WHICH CAN BE REPORTED?
For social and employee matters, companies can report information on actions taken to ensure gender equality, implementation of fundamental conventions of the International Labor Organization, working conditions, social dialogue, respect for right of workers to be informed and consulted, respect for trade union rights, health and safety at work, dialogue with local communities and / or the actions taken to ensure the protection and the development of those communities.
WHAT ARE THE INFORMATION ABOUT HUMAN RIGHTS, ANTI-CORRUPTION AND BRIBERY MATTERS WHICH CAN BE REPORTED?
The information regarding respect for human rights, anti-corruption and bribery that must be reported may refer to how companies prevent human rights abuses and / or the tools to fight corruption and bribery.
FOR EXAMPLE, FOR THE SOCIAL ASPECT “SECURITY AND HEALTH AT WORK” WHICH ARE THE INFORMATION THAT CAN BE REPORTED BY A COMPANY?
In this situation, in the non-financial reporting should be included information on the policies and procedures by which this aspect is managed. If the company has no policies or procedures, then it must explain why it does not exist and what it will do to achieve and implement the missing policies and procedures.
Also, the company must also present information on how it evaluates the management system regarding the aspect “Safety and health at work”, explaining whether analyzes and audits are carried out in this regard, as well as the results obtained. In order to be able to understand the impact of the company on the economy, society and the environment through the way it manages the aspect “Safety and health at work”, the non-financial reporting must include information on the risks derived from this aspect (eg accident risks, illness risks, etc.) and how the company manages them in order to reduce the negative, potential or real impact.
In order to allow interested parties to understand and measure the progress that the company is making from year to year, it must establish a series of non-financial indicators on the “Safety and health at work” aspect (eg the number and type of accidents, the number of days / hours lost following an accident; the number and type of occupational diseases, etc.).
The normative act conditions the reporting of non-financial information on environmental, social and employee maters, respect for human rights, anti-corruption and bribery matters by their relevance to the company and its stakeholders. Therefore, the content of non-financial reporting differs from one company to another and must result from a broad analysis process. The stages of the analysis process, as well as the other steps required for non-financial reporting, will be addressed in a future article.