With the adoption of the report by Pascal Durand (Renaissance, France), the European Parliament has just taken a major step on sustainable corporate governance. This report lays the foundations for governance that integrates social and environmental standards.
Companies operate in an economic environment where short-term financial profitability objectives have become a permanent constraint. If Europeans want to be consistent with their environmental and social commitments, on the issues of diversity and gender equality, it is essential to include information on the sustainability of their governance in the extra-financial reporting of major companies. This will encourage them to design their development strategy over the long term. This report calls for a new balance.
It is a political message that the European Parliament defends. It is a question of whether the EU is capable of promoting its economic, environmental and social model by strengthening its own standards, rather than having them imposed by the major players in the world economy, such as the United States or China.
The European Commission will propose in early 2021 a revision of the NFRD on extra-financial reporting. The EuropeanParliament is confident that it will take the recommendations contained in this report into account in its proposals.
Pascal Durand, rapporteur and member of the Legal Affairs committee said : "Our report calls for the creation of clear environmental, social and governance European reporting standards for companies, subject to certified and independent audits. To achieve a more sustainable world, this obligation to report must go hand in hand with an obligation to act. We therefore consider that companies should define and implement their own internal sustainability strategies, in consultation with stakeholders.”