Non-financial reports: an instrument for global sustainable development
Thursday, 16 November 2017
On July 5th, 2017 the European Commission presented guidelines on non-financial reporting designed to produce a strategic and forward looking approach to arranging reports, stakeholder relevancy, consistency and coherency. The proposed guidelines demonstrate how to disclose material information and produce fair, balanced and understandable content arranged in a comprehensive but concise way. They also complement the 2014/95/EU Directive on the disclosure of non-financial and diversity information, that prescribes member states and all resident businesses with more than 500 staff to set-up the reports related to the financial year beginning on 1st January 2017 or during the calendar year 2017.
The new non-financial reporting regulations make it obligatory to provide information on environmental matters, social and employee-related matters, respect for human rights, anti-corruption and bribery. Transparent reporting within the EU is a vital instrument for the implementation of the Paris Agreement as well as helping to achieve the UN Sustainable Development Goals. It should also help to secure stabilization of the Union’s economic growth.
Implementing the directive will make an important contribution to Sustainable Development Goals, for example, Goal 12 on ensuring sustainable consumption and production patterns and Goal 5 on achieving gender equality and empowerment of all women and girls.
Transparent non-financial reporting will also increase the amount of finance directed to cut greenhouse emissions and to develop climate resilience projects, fully in line with the Paris Climate Agreement.
A number of European market companies already possess long term expertise in non-financial reporting in full accordance with the updated EU regulation. This year, for example, LUKOIL presented their seventh Sustainability Report covering 2015-2016 calendar years.
Toby Trister Gati, President of TTG Global LLC and a member of LUKOIL’s board of directors said: “Social responsibility is one of the basic principles guiding the company’s business. LUKOIL was the first Russian company to make public its non-financial reports and, starting this year, LUKOIL will publish reports on sustainable development annually. Many of LUKOIL’s environmental protection and industrial safety technologies, unparalleled elsewhere, were used for the first time at the company’s facilities. For example, the zero discharge principle is used at all offshore platforms, which guarantees that production and consumer waste is collected to be sent onshore for disposal. LUKOIL’s environmental standards proved to be so comprehensive that they became the blueprint for the HELCOM guidelines for all the companies operating in the Baltic Sea.
LUKOIL is also growing its expertise in the field of renewable energy sources. The company manages solar and wind power projects in Bulgaria and Romania. The first solar farm in Russia is also being constructed by LUKOIL”.
LUKOIL’s report reflects the implementation of sustainable development goals laid out in the UN Declaration “Transforming Our World: the 2030 Agenda for Sustainable Development” in the company’s business, corporate culture and decision-making system. To achieve the goal of responsible consumption and production, LUKOIL implements Health and Safety, Better Working Environment, and Emergency Prevention and Response programs. The Biodiversity Conservation Program and Environmental Safety Program are helping to preserve both marine and onshore ecosystems respectively.
Sustainable Development Goals are also implemented in LUKOIL’s approach to human resources management. The company runs a number of corporate programs on Health and Safety, A Better Working Environment, Emergency Prevention and Response, Gender Equality and Good Jobs and Economic Growth. The company also regularly meets with indigenous northern minorities to discuss business practice. The interaction focuses on compensation for environmental and traditional natural resource damage and consultation with the indigenous population on the construction of facilities and exploration activities.
LUKOIL’s approach to non-financial reporting demonstrates how EU business’ corporate charity and sponsorship programs can contribute to achieving the UN’s Sustainable Development Goals. It fully complies with the 2014/95/EU Directive and sets the pattern for the European companies directly contributing to making EU economy more transparent, sustainable and eco-friendly.