Lawyers warn mid-tier European firms will be hit by reporting vote

 
Elizabeth Fournier
A CRUCIAL decision on non-financial reporting rules risks creating confusion and an uneven playing field across Europe, lawyers have warned.

The European Commission is due to vote this week on changes to EU law that governs how non financial firms update investors, introducing mandatory reporting standards for all companies employing more than 500 staff.

Though the draft directive is intended to harmonise standards across Europe and increase transparency around issues including diversity, environmental impact and anti-bribery controls, lawyers at Pinsent Masons are concerned that the rules could split the business community.

“Big businesses in developed economies will excel as they are generally used to sophisticated non-financial reporting and have the resources to absorb the costs,” said Frederic Ichay, a Paris-based partner.

“For smaller and mid-sized businesses, however, this creates an additional burden.”

Ichay estimates that up to 6,000 businesses could be affected by the new rules, with particular scrutiny of those bidding for public contracts.