Publication alert: CNMV - Informe sobre la supervisión por la CNMV de los EINF
We communicate that the Comisión Nacional del Mercado de Valores (CNMV) has published the Report on the supervision of NFIS and main areas of review for the next financial year.
1. Context
In 2017, Royal Decree-Law 18/2017 made it mandatory for issuers of securities on regulated markets to publish the Non-Financial Information Statement (NFIS). This regulation established the obligations imposed by the Non-Financial Reporting Directive (NFRD). In 2018, with the amendment of the Capital Companies Act, the information required in the NFRD was increased and the verification of this information by an independent audit service provider became mandatory. In 2019, the European Commission (EC) complemented the NFRD with a supplement on climate change disclosures. The following year, the European Parliament (EP) and the Council published the Taxonomy Regulation, which will oblige entities subject to the NFRD to include in their NFIS information on how and to what extent their activities qualify as environmentally sustainable, considering the taxonomy approved by the EU.
In this context, the CNMV has published a Report on the supervision of NFIS and main areas of review for the next financial year. The document describes the supervisory work carried out by the CNMV in relation to 2020 NFIS of issuers of securities traded on regulated markets in the EU. It also includes certain priority areas for the CNMV's supervision of 2021 NFIS.
2. Main points
Issuers subject to NFS publication. Of the 145 issuers that sent individual annual accounts, and of the 136 issuers that issued consolidated annual accounts for the financial year 2020, only 43 were required to include the NFIS in their individual management report.
- Four Ibex companies were not required to prepare the 2020 NFIS because they do not have more than 500 employees on average per year.
- All issuers obliged by Royal Decree Law 18/2017 submitted the corresponding NFS verification report.
Supervision of non-financial information.
- Formal review. Different recommendations were sent to 14 issuers, and further information was requested from 3 issuers on the following issues: i) the location of the NFIS; ii) the frameworks used; and iii) the tables of contents.
- Substantive review. There were recommendations to 16 issuers, and further information was required from 14 issuers, primarily in relation to the following aspects: i) consideration of dual materiality; ii) breakdown of their definition of value creation, and how the business model impacts and is impacted by non-financial issues; iii) the methodology and concepts considered for the calculation of the pay gap; iv) impacts of COVID-19.
- Risks related to climate change and other environmental issues. Practically all the companies reviewed include at least one Greenhouse Gases (GHG) emissions indicator, providing scope 1; 90% provide scope 2 emissions; and 55% provide scope 3 emissions. However, of those that provide scope 3 emissions, less than half indicate that this scope includes indirect emissions from the use of the entity's goods and services by its customers. It is considered necessary, depending on their materiality, to provide more details of the scope and the methodology and inputs used, also segmenting the emissions by geographical areas and lines of activity.
- Social and staff issues. About 20% of the companies in the selected sample do not provide comparative data on the pay gap, nor an explanation of its evolution. It is considered important to provide comparative data, an explanation of its evolution and, where relevant, a description of plans and measures to reduce the pay gap. Where relevant, a description of plans and measures to reduce the pay gap should be provided.
Special analyses performed. The following special actions were carried out during the review of the NFS:
- Increased monitoring of the impact of Covid-19 on NFI.
- Analysis on the nature and scope of the verification of the NFIS, in 2019 and 2020.
Supervision Plan for 2021 NFIS.
- The European Securities and Markets Authority (ESMA) established in October 2021 the following priority topics for NFI to be included in the 2021 NFIS: i) the impact of the Covid-19 pandemic, ii) climate-related issues, iii) expected credit loss, iv) taxonomy-related disclosures.
- The CNMV adds other recommendations such as: i) greater transparency regarding the carbon footprint of issuing entities; ii) an analysis of the perimeter of the NFIS and of the disclosures relating to the participation of the entity and its stakeholders in the value chain, and iii) a more detailed analysis of the consistency between the financial statements and the NFIS.
- In addition to ESMA's priorities, the CNMV considers it relevant that the information required by the Taxonomy Regulation and its contents are adequately identified in the NFIS and traceable, and recommends the inclusion of a specific section relating to the requirements of the taxonomy in the table which identifies where the different contents of the NFIS can be found.