The transition to a new corporate culture where finance and corporate social responsibility will no longer speak different languages. This is the added value of the directive that will obligate about six thousand European companies with over 500 employees to communicate information of a social and environmental character as well as economic information, based on what has emerged in the course of the round-table discussion about Directive 2014/95/UE which took place on 5th June during the presentation of Acea’s Sustainability Report 2014.
The Directive, due to be incorporated into national legislation by the end of 2016 to take effect from 2017, represents a breakthrough in the field of sustainability reporting, marking the transition from voluntary to mandatory. The directive does not dissolve the two tangles of sustainability reporting: indeed the obligation of reporting specific non-financial information brings with it the dilemma of the lack of comparability of the information published by firms and alongside this problem is that of the increasingly urgent need to identify qualitative and quantitative measurement systems for the so-called intangible capital.
These two critical issues also came up at the round-table discussion moderated by Riccardo Giovannini of RGA, in which main speakers from three utilities participated (Hera, Iren and ACEA) and other stakeholders including Utilitatis, Assonime, the Global Compact Network Italy Foundation, the Foundation for Sustainable Development, the University of St. Thomas (Angelicum) in Rome and the National Council of Chartered Accountants and accounting experts.
A common and shared vision of the Directive as a real opportunity to bring sustainability issues to corporate administrative boards also arose from the discussion. Although this will require a change in mentality, particularly from the corporate side opposed to that of sustainability, or rather, of those involved in the financial activities and the economic balance-sheet of companies.
"The biggest impact that the Directive hopes for is that of the transition to a new and innovative corporate culture, allowing for an evolved reading of the economic report that will clarify the importance and the need to measure aspects that have never been measured before", said Gianluca Principato, Head of Sustainability Reporting for the Hera Group.
And as for firms that already compile Sustainability Reports? It would be easy to imagine that you could meet the requirements of the Directive with a simple reference to your Sustainability Report. But this would be a limited interpretation, if not distorted, of the legislation itself. The Directive actually has a far more ambitious goal: to bring about a change of mentality, towards an ever greater integration and collaboration between the two areas which today concern themselves separately with the two types of corporate reporting, the traditional economic/financial one and that of sustainability, in order to ensure that they never speak different languages again.
"The real value of the Directive is precisely the cultural change that it requires, most probably viable through an reading of the economic-financial data in a CSR key. This will lead to the fusion of the two corporate "worlds" that of finance and of CSR", said Claudio Puliti, Head of CSR at Acea.
According to the roundtable participants it is positive that the declaration of the information required by the Directive was made by an independent auditor, thus excluding the risk of the information published being self-referential.
Leonardo Benvenuto, Corporate Law Executive at Assonime, said that the association has already got to work by sending the competent bodies amendment proposals to better implement the Directive, with particular reference to some critical and unclear aspects, including that of the range of involvement of the supply chain, the areas of reporting and of the "comply or explain" principle.
(edited by Alessia Albani, EticaNews 17th June 2015)