UK statutory instrument to implement EU Non-Financial Reporting disclosure (EU NFR)

New Companies Act and Company Regulation 2016 to transpose EU Directive 2014/95/ covering the disclosure of non-financial and diversity information by certain large undertakings and groups.

A new Companies Act and Company Regulation 2016 in the UK are an amendment to the Companies Act 2006 (Strategic Report and Directors’ Report) and the Company Regulations 2013. They were necessary to ensure the UK complied with the EU Non-Financial Reporting Directive (EU NRF) (2014/95/EU), which all EU member states had to transpose into law by the end of 2016. The objective of the EU NFR is to make disclosures around non-financial areas more comparable by requiring companies to publish a ‘non-financial statement’, as well as additional disclosures around diversity policy within their Governance Report. Companies within the scope of the Directive will need to disclose information on policies, risks and outcomes as regards environmental matters, social and employee-related aspects, respect for human rights, anti-corruption and bribery issues. These new requirements will apply to large Public Interest Entities with more than 500 employees. This came into force on 1 January 2017.