The package strengthens the rules under the Non-Financial Reporting Directive (NFRD), requiring companies to disclose information on social and environmental challenges. Its proposal would extend NFRD sustainability reporting requirements to all large and listed companies, meaning that nearly 50,000 companies in Europe will now need to follow them. The commission is developing a separate set of comparable standards for small and medium-sized enterprises.
The package includes rules requiring advisers to discuss clients’ sustainability preferences and changes to the EU Taxonomy Regulation – a classification system for sustainable investments, based on six objectives. It establishes technical screening criteria for the first two categories, climate change adaptation and climate change mitigation.
Valdis Dombrovskis, executive VP of the European Commission for its 'an economy that works for people' initiative, said that the measures would enable investors to re-orientate their activities towards more sustainable technologies and businesses, in line with making Europe climate neutral by 2050.
He commented: "Europe was a leader in reforming the financial system to support investments for climate change. Today, we are taking a leap forward with the first-ever climate taxonomy which will help companies and investors to know whether their investments and activities are really green. This will be essential if we are to mobilise private investment in sustainable activities."