On 15th April 2014, the European Parliament adopted a new directive mandating companies to annually disclose information regarding environment, social, employee-related matters, respect for human rights, anti-corruption and fair business principles, and diversity in their board of directors.
The directive only applies to large companies in the European Union with more than 500 employees and a balance sheet exceeding 20 million euros or a net turnover of 40 million euros.
The directive’s objectives are to increase:
• Companies’ transparency regarding their impact on society
• Diversity in boards
• Corporate’s accountability to the public.
Particularly, the directive requires concerned companies to disclose the policies, results and risk-related matters of the topics mentioned above. To do so, companies may use any relevant and accepted framework, such as the GRI, ISO26000 or United Nations Global Compact 10 Principles. If you are a European company and this directive directly applies to you, you might be glad do know that the EcoVadis assessment will adequately prepare you to comply.
How is EcoVadis preparing you?
Ensuring that our users are aware of new regulations and prepared to comply is very important for us. EcoVadis CSR methodology is based upon those referenced frameworks (i.e. ISO26000, GRI, UN Global Compact), and when going through the EcoVadis’ assessment, you will be collecting and organising your company’s CSR information that will be relevant for disclosure under the new EU directive. If your company lacks certain CSR information today, EcoVadis CSR monitoring tools will help you identify areas of improvement for your company, thereby preparing you for disclosure when the EU directive comes into law in each EU member state (that will happen latest 2 years after 15th April 2014).
For our European clients, this directive means your company may need to disclose how your supply chain impacts society and the environment, or if your supply chain is delivering conflict minerals into your products etc. Monitoring your suppliers through the EcoVadis solution allows you to correctly identify the potential CSR issues relevant for disclosure under the new directive. Your company will know the strengths and areas of improvement that your selected suppliers have, manage these CSR risks from your supply chain and confidently disclose these CSR information under the new EU directive.
At the end, this emphasis on transparency is about understanding the risks and impacts one company has, putting in systems to address those risks, and creating value for society. At EcoVadis, we too believe addressing CSR will create real and tangible value for both the company and society. We look forward to creating more value with our clients and their suppliers.
This article was written by Sheng Ou Yong, CSR Analyst @ EcoVadis
