2 February 2021
The CMVM today published a model report for compliance with the duty to disclose of non-financial information by issuers of securities admitted to trading on a regulated market. This is a voluntary adoption model, which seeks to standardise information on existing legal duties, contributing to the existence of standardised information on matters concerning the integration of sustainability factors in national business activity, to the advantage of investors and national market development.
The CMVM initiative, which benefited from a participatory public consultation process and which greatly enriched the result, aims to support issuers in complying with the legal duties for reporting information on the approach to financial, environmental, social and corporate governance sustainability, themes which have been gaining increasing importance at international and national levels and which will increasingly constitute a factor of issuer competitiveness and promotion of investor confidence.
It is important to note that no additional duties are foreseen in this model but rather, it seeks to contribute with a uniform format and structure, as well as with some guidelines, which make the information disclosed by issuers comparable and thus more useful to the recipient, namely the investor.
Monitoring and, in some cases, even anticipating the trend and legal duties related to non-financial reporting, it appears that there is already an increasing number of entities in the national market that release sustainability reports or non-financial information which results in a wide diversity of approaches. This diversity, particularly regarding the use of certain benchmarks, impairs the comparability and usefulness of information for stakeholders in corporate life, particularly for investors, which tends to limit the benefits of disclosure for each company and for the market as a whole.
Thus, the report model made available today which can be voluntarily adopted by issuers that are subject to the legal duty for annually reporting non-financial information, seeks to respond to the standardisation needs signalled by the recipients of that information, and is divided into two parts:
The first part describes the business model; identifies the main risk factors; and describes policies that are implemented in the company on issues pertaining to environmental, social and fiscal, employees and gender equality and non-discrimination, human rights and the fight against corruption and bribery attempts.
- The second part explains the standards/ guidelines followed when preparing non-financial information; the scope and methodology for calculating the benchmarks; and in the event that certain policies are not applied, the reasons that substantiate same.
In addition to promoting comparability and quality of information in the market, the present model seeks to simplify and limit to the necessary extent, the regulatory burden arising from the reporting duty on this matter to issuers. Thus, it provides, at the benchmark level for each theme, only the minimum elements to be disclosed with a view to the practical utility of the model and information comparability. It is also guaranteed that issuers that already adequately and effectively fulfil their duty to disclose non-financial information, albeit via a structure different to that provided for in the model published today, can maintain the current communication formats providing only the inclusion of a correspondence table between their reports and this published model.
The success of this initiative and this model depends, obviously, on the degree of the issuers' adhesion and CMVM expects that the changes introduced as a result of the various interactions with the market will allow this model to be used as early as 2021, within the scope of non-financial information reporting for the 2020 financial year.