FERMA Press Release on non financial risks reporting

1. PRESS RELEASE
19/06/2013
Disclosure alone does not control companies’ social
risks, FERMA tells European Commission and the
European Parliament
Public disclosure of a company’s social issuesis good, but
by itself does not show that the risks are under control,
the Federation of European Risk Management
Associations (FERMA) has told the European Institutions.
“For numerous large companies, transparency has become
a fundamental part of their business strategy. The
disclosure of environmental and social information can
therefore be viewed in a positive way,” said FERMA
President Jorge Luzzi. “But it is disclosure plus good risk
management that creates the conditions for transparency
and sustainability. By itself, disclosure is not enough.”
He also added a warning. “If the regulations do not take
sensitive industry-specific issues into account, they could
actually damage competitiveness and so the sustainable
performance they are aiming to promote.”
These comments are part of FERMA’s response to a draft
directive adopted by the Commission on 16 April 2013
and now at the European Parliament under the leadership
of the Legal Affairs Committee. Its aim is to increase the
transparency of larger companies through more non-
financial reporting.
The proposed directive requires companies with more
than 500 employees to disclose information on their

2. policies, risks and results on environmental matters, social
and employee-related aspects, respect for human rights,
anti-corruption and bribery issues, and board room
diversity.
Among FERMA’s comments:
Disclosure requirements should be flexible enough
to take into account industry-specific sensitive
areas, market strategy on a global level and
competition.
Increased non-financial reporting will remain a
benefit for businesses only if does not turn into a
heavy cost and administrative burden.
Sustainability of performance requires a thorough
risk management process that involves knowledge
and understanding of the risks.
Risk management should, therefore, be part of the
Parliamentary discussion of the draft Directive.
Board diversity and social issues should be treated
separately.
Notes to journalists:
The European Commission adopted on 16 April 2013 a
proposal for a directive enhancing the transparency of certain
large companies on social and environmental matters. This
Directive amends the Accounting Directives (Fourth and
Seventh Accounting Directives on Annual and Consolidated
Accounts, 78/660/EEC and 83/349/EEC, respectively). Its aim is
to increase companies’ transparency and performance on
environmental and social matters, and, therefore, to contribute
effectively to long-term economic growth and employment.
The Legal Affairs committee is the responsible committee at
the European Parliament and appointed a rapporteur on 29
May 2013.
Companies concerned will need to disclose information on
policies, risks and results as regards environmental matters,
social and employee-related aspects, respect for human rights,
anti-corruption and bribery issues, and diversity on the boards
of directors.

3. Press release: http://europa.eu/rapid/press-release_IP-13-
330_en.htm
For more information, contact
Lee Coppack
FERMA media coordinator
lee@coppack.co.uk
+44 (0)20 8318 0330 or
+44 (0)7843 089904
OrFlorence Bindelle
FERMA executive manager
florence.bindelle@ferma.eu
+32 (2) 761 94 31
About FERMA
The Federation of European Risk Management
Associations (FERMA) brings together 22 national risk
management associations in 20 European countries.
FERMA has 4,500 individual members representing a wide
range of business sectors from major industrial and
commercial companies to financial institutions and local
government bodies. These members play a crucial role for
their organisations with respect to the management and
treatment of complex risks and insurance issues.
Member associations are from the following countries:
Belgium (BELRIM), Czech Republic (ASPAR CZ), Denmark
(DARIM), Finland (FinnRiMa), France (AMRAE), Germany
(DVS/BfV), Italy (ANRA), Luxembourg (PRiM), Malta
(MARM), Netherlands (NARIM), Norway (NORIMA),
Poland (POLRISK), Portugal (APOGERIS), Russia (RusRisk),
Slovenia (Sl.RISK), Spain (AGERS and IGREA), Sweden
(SWERMA), Switzerland (SIRM), Turkey (ERMA) and United
Kingdom (Airmic).