NFRD: Definition

Adopted by the European Union in 2014, the Non-Financial Reporting Directive (NFRD) requires specific companies to furnish non-financial disclosure documents alongside their annual reports, commonly referred to as “sustainability reports.” By 2018, all 28 EU member states had incorporated the NFRD directive into their national legislation, imposing compliance obligations on companies operating within their territories with a workforce exceeding 500 employees. This directive is applicable to public-interest companies with over 500 employees in the EU, encompassing approximately 6,000 companies and groups, including listed companies, banks, insurance firms, and other entities of public interest. The directive recommends adhering to international standards such as the UN Global Compact, OECD Guidelines, ISO 2600, or the Global Reporting Initiative (GRI). Furthermore, this directive amends the accounting directive 2013/34/EU.