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Non-Financial Reporting Directive (NFRD)

Directive 2014/95/EU of the European Parliament on the disclosure of non-financial and diversity information by certain large undertakings and groups.

Link: Directive 2014/95/EU

Attention! This website is still an ongoing project. Therefore, the content is currently under development.


Content of this page:

Please cite this register in conjunction with the following article:
Hummel, K., Jobst, D., 2023. An Overview of Corporate Sustainability Reporting Regulations in the European Union.


In 2014, the European Parliament and the Council adopted the NFRD, which amended the Accounting Directive (Council Directive 2013/34/EU) and mandates the disclosure of nonfinancial and diversity information.

Adoption of the directive:22 October 2014
National transposition until:6 December 2016
Application:Applicable for financial years starting on 1 January 2017 or during the calendar year 2017


  • Large firms (and groups)

    • which are public interest entities (PIEs)

    • with an average number of more than 500 employees (on a consolidated basis).

  • PIEs are defined as:

    • EU companies admitted to trading on an EU regulated market,

    • credit institutions,

    • insurance companies and

    • other companies designated by member states as PIEs

  • The Accounting Directive determines an undertaking to be large if it exceeds at least two of the following criteria on its balance sheet date:

    • a balance sheet total of EUR 20 million,

    • net turnover of EUR 40 million,

    • an average number of employees during the financial year of 250.


According to the NFRD, its objective is:

  • To increase the relevance, consistency and comparability of information disclosed by certain large undertakings and groups across the Union’ on nonfinancial and diversity topics

  • To stimulate change toward a sustainable global economy

Disclosure requirements

The NFRD extends the scope of management reports and requires the inclusion of a nonfinancial statement encompassing the development, performance, position and impact of activities related to at least the following areas:

  • the environment,

  • social and employee matters,

  • respect for human rights, and

  • anti-corruption and bribery matters.

The NFRD requires companies (and groups) to report about their

  • business model,

  • policies relating to these areas including implemented due diligence processes,

  • risks related to matters and risk management, and 

  • relevant KPIs

Additionally, an explanation is required in cases where no policy regarding one or more of these areas is pursued (‘comply or explain’).

Moreover, the NFRD extends the scope of the corporate governance statement, as defined in the Accounting Directive (Article 20), to also contain diversity information. In particular, for EU companies admitted to trading on an EU regulated market, the corporate governance statement shall additionally include a description of the applied diversity policy, including the policy’s objectives, implementation and results. According to the NFRD, the policy should address administrative, management and supervisory bodies and cover aspects such as age, gender, and educational and professional backgrounds.

Reporting format

The NFRD does not require the use of specific sustainability reporting standards; rather, it refers to various voluntary reporting standards and frameworks.

Moreover, instead of the publication of a nonfinancial statement, member states may also allow firms to issue a separate report.

With regard to assurance, the NFRD requires that a statutory auditor or audit firm checks the presence of the (consolidated) nonfinancial statement but not the content of it. Rather, according to the NFRD, the management and the supervisory board of a firm are responsible for preparing and publishing the nonfinancial statement and for verifying its content.


Nonbinding reporting guidelines were published by the European Commission in 2017 and 2019:


Updates to this page:

14 September 2023Updates in the section 'Disclosure requirements'
29 November 2022Content updated to align with: Hummel, K., Jobst, D., 2021. The Current State and Future of Corporate Sustainability Reporting Regulations in the European Union.
15 September 2022Update to the current status of the NFRD.