The aim of Directive 2014/95/EU, which was approved by the European Parliament in April, is promotion of economic growth, employment and welfare, the valuing of diversity, protection of the environment, the fight against corruption and a focus on the transparency and accountability of large and medium-sized European businesses. The decree was implemented by the European Council in September and published in the Official Journal of the EU in November.
The measure applies to more than 6,000 companies in the EU that have more than 500 employees and must be included in national legislation by the end of 2016. It will be adopted by European commercial laws (and will therefore be consolidated in the annual financial statements of these companies), requiring companies to disclose non-financial information relating to environmental, social and governance issues; a useful tool for many businesses – such as the Enel Group – to increase transparency in their activities, promoting communication with those who invest in sustainable initiatives.
Enel organised, in cooperation with the Global Compact Network Italy and the Italian Business Reporting Network (NIBR), the conference The European Directive on Non-Financial Information in Rome on 23 January, which featured discussion of the opportunities and challenges for the European business system following the introduction of the directive.
'Enel is convinced that innovation and sustainability are key factors for success, both now and in the future,' said Enel's Head of Country Italy Carlo Tamburi. 'The company welcomes all legislative and market regulatory initiatives that show its customers and investors that it values sustainability issues.'
The Directive brings the continent into line with non-financial reporting legislation in countries like France, Spain and Denmark. Tamburi observed that the sector needs a change of tack to make sustainability 'a new business philosophy'.
'Enel's duty is to set an example and lead the way,' he added. Despite not having specific legislation, Italy is now in a position of CSR leadership thanks to the best practices of companies such as Enel, Pirelli, Generali and others.
The Group's commitment to sustainability, recalled Tamburi, is recognised by Socially Responsible Investing funds (SRIs), which since 2011 have increased their holding in Enel from 13.9 to 15.6 percent of Enel's identified institutional shareholders, about 5.5 percent of the Group's total shares and equal to around eight percent of the free float.
According to Stefano Scalera, advisor to the Italian Ministry of Economy, the implementation of the legislation will bring benefits to traditional investors and to stakeholders, because greater transparency will reduce business risks. 'In addition to added value for shareholders, these initiatives are useful for both policy makers, who will be able to see if there is a risk of unbalanced development in markets, and people, who can see the degree of responsibility within a business.'