Summary: European Parliament adopts important new rules on corporate transparency and accountability

15 April 2014: The European Parliament has adopted new legislation requiring companies to disclose the steps they take to prevent damage to human rights and the environment as a result of their work. This decision, which was passed by a majority of 599 to 55, follows years of advocacy by SRT grantee the European Coalition for Corporate Justice (ECCJ) and other organisations. It represents a significant step forward for corporate social responsibility, as it has not previously been mandatory for companies to supply this information.

6,000 large EU-based companies will now be required to provide information on the risks they pose to human rights and the environment (including in their supply chains), as well as on corruption, diversity and social issues. However the number of affected companies was lowered during negotiations between the European Council and Parliament, and only about a third of the number foreseen in the original proposal will now be covered. EU member states will also be allowed to grant exemptions to certain companies.

Jerome Chaplier, Coordinator of ECCJ, said, “This is an important step forward. The reform recognises that the environmental and human rights impacts of companies are of key concern for society as a whole. It will empower people to access information on how they might be affected by business operations, and enable shareholders to hold the management accountable for negative impact. However, we regret that the original proposal has been weakened so much.”

Full press release from ECCJ: http://www.corporatejustice.org/European-parliament-votes-for.html?lang=en

Article from the Guardian by ECCJ’s Jerome Chaplier: http://www.theguardian.com/sustainable-business/eu-reform-listed-companies-report-environmental-social-impact