Non-financial reports; do they really benefit all companies? 

A benefit for some companies and an obligation for others. Let me explain. No one doubts that ESG issues are the main protagonists and that stakeholders, who demand responsible leadership from companies, want to know how organizations are transforming to meet growing social and environmental demands. Never have we seen such rapid progress in the dissemination of this type of reporting. 

But, in addition to the market itself that demands transparency in these matters, since 2018, the law on non-financial information and diversity sets the rules for two types of companies: 

  • those with more than 500 workers. 
  • those which qualify as public-interest entities under audit legislation or which, for two consecutive financial years, meet at least two of the following conditions: 
    • more than 250 employees 
    • those for which the total assets are more than EUR 20 million. 
    • those where the net annual turnover exceeds 40,000,000 

To comply with the law, these companies, among other things, must report on the development, results, and situation of the group, stating in their report: 

  • A brief description of the business model and the policies developed (with the results of the year) 
  • Risks linked to the company’s activities 
  • Non-financial key performance indicators (standards for non-financial key indicators that are generally applicable and that comply with the European Commission’s guidelines on non-financial key performance indicators and the Global Reporting Initiative standards will be used) 

And the impact of its activity regarding: 

  • environmental issues (circular economy and waste management, greenhouse gas emissions, water consumption, air pollution, etc.) 
  • social concerns (measures to facilitate the enjoyment of reconciliation, training, accessibility for people with disabilities, equality, safety at work, etc.) 
  • respect for human rights and the fight against corruption and bribery (instruments available to the company to deal with these situations) 
  • information about the company in which it operates (commitments to sustainable development, subcontracting and suppliers, tax information. . .) 

Although a proposal has recently been put on the table to introduce new reporting standards at the European level, companies should therefore keep an eye out for new updates in this area. 

María Luisa Guerrero, Senior Consultant for Estudio de Comunicación 


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