NFRD (Non-Financial Reporting Directive)
Previous EU law for non-financial reporting, replaced by CSRD.
What is NFRD (Non-Financial Reporting Directive)?
The Non-Financial Reporting Directive (NFRD) was an EU law that required certain large public-interest entities to disclose information on environmental, social, and governance (ESG) matters. It aimed to increase transparency on how companies address sustainability challenges and opportunities, fostering more responsible business conduct.
Why is NFRD (Non-Financial Reporting Directive) important?
The NFRD was important as an initial step towards mandatory sustainability reporting in the EU, paving the way for more comprehensive legislation. It raised corporate awareness of ESG issues and provided a basis for stakeholders to assess companies' non-financial performance, contributing to a broader sustainable finance agenda.
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Frequently asked questions
It applied to large public-interest entities with more than 500 employees, including listed companies, banks, and insurance companies.
It required disclosure on environmental protection, social responsibility and treatment of employees, respect for human rights, anti-corruption and bribery, and diversity on company boards.
The NFRD was deemed insufficient in scope and detail to meet the EU's growing sustainability ambitions and the needs of stakeholders, leading to its replacement by the more robust and extensive CSRD.