non financial reporting: what differences accross european

Non Financial reporting: What differences accross European countries?

October 3rd 2019

© 2019 Property of EY & Associés

Major findings

Context and methodology

Table

Conclusions


Context and methodology

3


Context and methodologyInformation collected in 12 countries

4

• Revised NF Reporting Directive project

• French initiative for a non financial standard at Europeanlevel following Mr de Cambourg report

8 countries with detailed results on representative sample of companies

4 countries with information on the EU directive local transposition

FRANCE SPAIN ITALY

GERMANY BELGIUM NETHERLANDS GREECE

PORTUGAL

UK SWEDEN FINLAND DENMARK


Context and methodologyInformation collected from 156 European NF Statements in 11 countries

5

• Data collected among annual and sustainability reports from 156 European companies and compared to the 102 French DPEF (SBF120)

Number of companies included in the European analysis : 156

FRANCE SPAIN ITALY GERMANY BELGIUMNETHERLANDS

GREECE

PORTUGAL

UK

102

3

1831 201716

12

20

FINLAND

19

SWEDEN

n.a

DENMARK

n.a


Major findings

6


Shared sustainability topics open the way for a non-financial standard at European level

7

Philanthropy and community

Talent management, health and safety

Responsible supply chain, human rights

Ethic and corruption

Customer satisfaction, innovation and products

• Shared topics across countries allowing alignment of non-financial reporting despite diversity of approaches, materiality or CSR risks assessment

• Alignment of the number of material topics covered

• New topics on responsible supply chain, customer satisfaction and products

• Philanthropy developed in most countries but less covered in France

12 material topics on average in

comparison with 10 in FranceClimate change and management of resources


Shared sustainability topics: focus on CO2 emissions reporting

8

• Most companies report on CO2 emissions on scope 1, 2 and 3

• Often based on GRI standards and CDP requirements

• Often quantitative objectives set to support carbon reduction strategies

Schneider ElectricACS Group

Signify

UCB

Intesa Sanpaolo


Materiality analysis is a common practice across European countries CSR risks are mainly covered by qualitative information on mitigation measures

9

Materiality analysis

CSR risks assessment

Legend: SometimesAlmost always Almost neverAlways

FRANCE SPAIN ITALY GERMANY BELGIUMNETHERLANDS GREECEPORTUGAL

France: 75% of DPEF are based on a CSR risks analysis

Rest of Europe: 90% of companies use materiality analysis to address material issues


There is a growing trend to link materiality topics with the SDGs but lack of quantitative analysis of impacts

10

Intesa Sanpaolo

Solvay

NN Group


Efforts have been observed to present the business model but still progress to be made on the content

11

Presented

Infographic form



France, Spain, Italy and Belgium: 100% of companies present a business model

Rest of Europe: 75% of companies present a business model


More and more companies set quantitative objectives on material sustainability topics but still progress to be made on the relevance of the KPIs

12

QuantitativeObjectives



KPIs

Intensity ratio and no absolute values

France: 75% of companies have quantitative objectives

Rest of Europe: 62% of companies have quantitative objectives


The NF Statement is gradually replacing the sustainability report

13

The NF Statement is mostly published in Annual reports across

all countries

Growing trend toward integrated reporting of financial and non-

financial information

The business model is often published in the first part of the

Annual Report in the Group’s presentation chapter

65% of companies in France

44% in the rest of Europe

Separate NF statement or a stand-alone sustainability reports still

exist in some countries:

SPAIN ITALY GERMANYBELGIUM PORTUGAL

FRANCE UK NETHERLANDS ITALY


There is still need for more synthesis and prioritisation of non financial information

14

51 pages in France on average (4 pages increase vs. Grenelle 2)

43 pages on average in other European Countries

18 pages on average in Germany because of country guidelines (Nachhaltigkeitsrat)

Still existing need to work on synthetic NF Statement focused on material sustainability issues

Need to reconcile synthetic non financial information focused on material issues and non-financial rating agencies expectations


Example of Germany’s guidelines for synthetic sustainability reporting

15

GERMANY

“The declaration of conformity is composed of descriptive sections of texts and performance indicators that are backed up by figures. It should be as long as necessary and as short as possible in order to draw readers’ attention to the essentials. By way of orientation, the short reports on the individual criteria should be between 500 and 3,000 characters long”

Checklist on all sustainability matters

Comply or explain logic


Focus on the UK Strategic reportThe non financial reporting is already covered by the strategic report

16

• The Companies Act 2006 (Strategic Report and Directors’ Report) Regulations 2013 enforced the strategic report

• It should: • highlight linkage

between the content elements

• be focused on materiality

• be concise• have a forward

looking orientation

• The NF Statement has been included in the strategic report

Dedicated NF statement chapter in the strategic report included in the annual report

UK


Mandatory reliability check by a third independant party

Mandatory presence check**

Only France, Spain and Italy have additional verification requirements Other countries have frequent voluntary verification practices

Mandatory presence check + market practice of voluntary reliability check by a third party*

* NL: mandatory check of presence and consistency

** Possible occasional voluntary verification


Mandatory verification:France is the only country where it is common practice to have observations in the verifier’s report

18

Qualification or observations in the verifier's report

Verification by

More than 50% with observations

Mostly on policies and due diligence on CSR risks

Almost no observations

Mostly on missing required information

Statutory auditor Statutory auditor

Mainly Statutory auditor

Accounting brands


Standards and suitable criteria

Company specific reporting protocols

by lawcommon practice

FRANCE SPAIN ITALY


Voluntary verification: There is a Diversity of standards used to verify the NFS but prevalence of the GRI

19

Statutory auditor Statutory auditor Statutory auditor Statutory auditor

Or

Accounting firms

Statutory auditor

Qualification or observations in the verifier's report

Verification by

Standards and suitable criteria






GERMANY BELGIUMNETHERLANDS* DANEMARKPORTUGAL

* NL: mandatory check of presence and consistency


French company specific reporting protocol…

20

Calculation methodology

Detailed definitions for each sub indicators with :

- Definitions

- Inclusions

- Exclusions

- Examples


…Compared to GRI global reporting guidelines

21

Calculation methodology

Guidelines on each disclosure


Conclusions

22


Key messages on European reporting following EU Directive on non financial reporting

23

There are numerous shared practices in Europe on sustainability reporting:

• Large use of materiality analysis to identify NF topics that matter

• Shared material topics and similar average number of material topics identified

• Similar NF Statements in terms of form

There is a need for harmonisation on sustainability verification in order to get comparable data:

• Numerous countries with different voluntary verification schemes

• Need for more precise and common suitable criteria

2

Are we going towards a possible common standard ?

• Some shared topics with the same level of reporting such as CO2 emissions (scope 1, 2, and 3) or Accident rate

• Complemented by Industry specific requirements

3

1


Appendix

24


Annex

Companies included in the studyACCOR FranceADP FranceAIR FRANCE -KLM FranceAIR LIQUIDE FranceALSTOM FranceALTEN FranceALTRAN TECHN FranceARKEMA FranceATOS FranceAUCHAN FranceAXA FranceBEL FranceBIC FranceBIOMERIEUX FranceBNP PARIBAS FranceBOLLORE FranceBOUYGUES FranceBPCE FranceBUREAU VERITAS FranceCAPGEMINI FranceCARREFOUR FranceCASINO GUICHARD FranceCGG FranceCNP ASSURANCES FranceCOVIVIO FranceCREDIT AGRICOLE France

CREDIT MUTUEL FranceDANONE FranceDASSAULT AVIATION FranceDASSAULT SYSTEMES FranceEDENRED FranceEDF FranceEIFFAGE FranceELIOR GROUP FranceELIS FranceENGIE FranceERAMET FranceESSILORLUXOTTICA FranceEURAZEO FranceEUROPCAR MOBILITY FranceFAURECIA FranceFNAC DARTY FranceGECINA NOM FranceHERMES INTL FranceICADE FranceILIAD FranceIMERYS FranceINGENICO GROUP FranceIPSEN FranceIPSOS FranceJC DECAUX FranceKERING France

KLEPIERRE FranceKORIAN FranceLA POSTE FranceLAGARDERE FranceLEGRAND FranceL'OREAL FranceLVMH FranceMAISONS DU MONDE FranceMERCIALYS FranceMETROPOLE TV FranceMICHELIN FranceNATIXIS FranceNEOPOST FranceNEXANS FranceNEXITY FranceORANGE FranceORPEA FrancePEUGEOT FrancePLASTIC OMNIUM FrancePUBLICIS GROUPE FranceRENAULT FranceREXEL FranceROTHSCHILD & CO FranceS.E.B. FranceSAFRAN FranceSAINT GOBAIN France

SANOFI FranceSCHNEIDER ELECTRIC FranceSCOR FranceSOCIETE GENERALE FranceSODEXO FranceSOPRA STERIA GROUP FranceSPIE FranceSUEZ FranceTARKETT FranceTECHNICOLOR FranceTELEPERFORMANCE FranceTHALES FranceTOTAL FranceTRIGANO FranceUNIBAIL-RODAMCO-WE FranceVALEO FranceVALLOUREC FranceVEOLIA FranceVICAT FranceVINCI FranceVIVENDI FranceVYV FranceWENDEL FranceWORLDLINE France


AnnexCompanies included in the study

AB Inbev BelgiumAckermans & van Haaren BelgiumAgeas BelgiumAperam BelgiumArgen-X BelgiumBarco BelgiumCofinnimo BelgiumColruyt Group BelgiumGalapagos BelgiumGBL (Groupe Bruxelles Lambert) BelgiumING Group BelgiumKBC BelgiumOntex Group BelgiumProximus BelgiumSofina BelgiumSolvay BelgiumTelenet BelgiumUCB (Union Chimique Belge) BelgiumUmicore BelgiumWDP (Warehouses De Pauw) Belgium

Ilmarinen FinlandCitycon FinlandNokian Tyres FinlandKeva FinlandCargotec FinlandWärtsilä FinlandKesko FinlandKone FinlandKonecranes FinlandFortum FinlandNeste FinlandUPM FinlandElisa FinlandDNA FinlandTikkurila FinlandKemira FinlandFiskars Group FinlandSampo Group FinlandValmet Finland

Evonik Germany

Vonovia Germany

Jostwerke Germany

HeidelbergCement Germany

Deutsche Bank Germany

Leoni AG Germany

Continental Germany

Allianz Germany

Deutsche Post Germany

Adidas Germany

Deutsche Telekom Germany

Fuchs Petrolub Germany

SAF Holland Germany

Henkel Germany

CTS Eventim Germany

Fresenius Germany

Munich RE Germany

XING Germany

Deutz Germany

Fraport Germany

AEGEAN Airlines Greece

Alpha Bank Greece

FOURLIS HOLDINGS SA

Greece

GEK TERNA Greece

Hellenic Petroleum Greece

Quest Group Greece

Lamda Development Greece

MARFIN INVESTMENT GROUP

Greece

Mytilineos Greece

PIRAEUS BANK Greece

Public Power Corporation

Greece

Karamolegkos S.A. Greece



Amplifon Italy

Brembo S.p.A. Italy

Brunello Cucinelli Italy

De'Longhi Italy

Eni Italy

Fiera Milano Italy

AssicurazioniGenerali

Italy

Il Sole 24 Ore Italy

Interpump Group Italy

Intesa Sanpaolo Italy

LUVE Italy

Massimo Zanetti Beverage Group

Italy

Saipem Italy

Snam S.p.A. Italy

TXT E-solutions S.p.A Italy

Unicredit Italy

A.S.R. Netherlands

Aalberts Netherlands

ABN AMRO N.V. Netherlands

Aegon Netherlands

Ahold Delhaize Netherlands

Akzo Nobel Netherlands

ASML Netherlands

DSM Netherlands

Galapagos Netherlands

ING Groep Netherlands

KPN N.V. Netherlands

NN Group Netherlands

Randstad N.V. Netherlands

Royal Philips N.V. Netherlands

Royal Vopak N.V. Netherlands

Signify Netherlands

Wolters Kluwer N.V. Netherlands

Altri, SGPS, S.A. Portugal

Impresa Portugal

Corticeira Amorim, SGPS Portugal

Correio de Transporte Terrestre Portugal

EDP - Energias de Portugal Portugal

Galp Portugal

Ibersol Portugal

Jerónimo Martins Portugal

Martifer Portugal

Media Capital Portugal

Mota-Engil Portugal

NOS Portugal

Ramada Portugal

Redes Energéticas de Portugal Portugal

Semapa Portugal

Sonae Portugal

The Navigator Company Portugal

Toyota Caetano Portugal



Acciona, S.A. SpainAcerinox, S.A. SpainActividades de Construcción y Servicios, S.A.

Spain

AENA S.M.E., S.A. SpainAmadeus IT Group, S.A. SpainBANCO SABADELL, S.A. SpainBANCO SANTANDER, S.A. SpainBankia, S.A. SpainBANKINTER, S.A. SpainBBVA, S. A. SpainCaixaBank, S.A. SpainCellnex Telecom, S.A. SpainCIE AUTOMOTIVE, S.A. SpainENAGAS, S.A. SpainENCE Energía y Celulosa S.A. SpainEndesa, S.A. SpainFERROVIAL, S.A. SpainGrifols, S.A. SpainIBERDROLA S.A. SpainINDRA Sistemas, S. A. SpainINDUSTRIA DE DISEÑO TEXTIL Spain

INTERNATIONAL CONSOLIDATED AIRLINES GROUP, S.A.

Spain

MAPFRE S.A. SpainMediaset España Comunicación, S.A. SpainMelia Hotels International, S.A. SpainNaturgy Energy Group, S.A. SpainRED ELECTRICA CORPORACION, S.A. SpainREPSOL, S.A. SpainTECNICAS REUNIDAS, S.A. SpainTELEFÓNICA, S.A. SpainVISCOFAN S.A Spain

Capita plc UK

Lloyds Banking Group

UK

Pearson plc UK

© 2019 Property of EY & Associés29

Eric Duvaud

Partner – Sustainable Performance & Transformation

+33 1 46 93 64 77

+33 6 09 24 25 20

[email protected]

Hélène Odic

Manager – Sustainable Performance & Transformation

+33 1 46 93 51 58

+33 6 99 21 78 26

[email protected]

Since 1994, EY France's Sustainable Performance and Transformation team has been working with clients on sustainable development issues. With more than 100 specialized consultants, EY France's Sustainable Performance & Transformation team relies on an international network of more than 700 consultants, 400 of them are based in Europe.

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