Environmental and social risks significantly impact all our lives. Accountancy Europe welcomes the EU initiative to further embed sustainability into the EU corporate governance framework and provided feedback on its roadmap. To deliver on the Paris Agreement and the EU Green Deal, businesses need to become accountable for their impacts on the environment and society.
Sustainable finance has a key role to play in the transition. Clear, consistent, and evenly enforced legislation across countries is key to ensure that sustainability is fully embedded into corporate decision making.
Thought leadership ideas 1 year ahead of EU action
The economy needs to change radically to achieve climate neutrality and sustainability. In June 2019, 10 ideas to make corporate governance a driver of a sustainable economy already highlighted the instrumental role of corporate governance in changing the system.
We are happy to see that the EC roadmap on sustainable corporate governance covers many of the ideas this publication had presented 1 year ahead. Our feedback recommends the following points for the EC to even further improve its sustainable corporate governance legislation:
- Integrate sustainable value creation into the board’s duties
- Set effective mechanisms to verify due diligence disclosures on the environment and human rights
- Expand the legislative scope to all companies that significantly impact the environment and society, regardless of their size
- Align non-financial information (NFI) reporting with sustainable corporate governance
What accountants can do for sustainable corporate governance?
Professional accountants play a crucial role in their different capacities at all stages of corporate governance. As good business decisions start with reliable information, accountants contribute by measuring impacts, disclosing information, and adding credibility to what is reported. Auditors can add value by providing assurance on corporate governance, internal controls, and sustainability reporting.
We will keep contributing Accountancy Europe’s expertise and thought leadership to advancing the EU ambitious agenda for climate neutrality and sustainability.