Assess record for 'Disclosure of Non-Financial Information by Companies'

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1 Page 1 of 5 Assess record for 'Disclosure of Non-Financial Information by Companies' Meta Informations Creation date Last update date User name null Case Number Invitation Ref. Status Background Information For the purpose of analysis of this consultation you want to be identified as -single choice reply- If you are preparer, are you -single choice reply- Please indicate your size: -single choice reply- Are you listed on regulated market? - single choice reply- N Preparer Non-financial company Large In which country(ies) you are listed: -open reply- NYSE Euronext Brussels Name(s) (of respondent and of your organisation / company) -open reply- Michel BANDE Country where your organisation / company is located -single choice reply- BE - Belgique / België Please provide the name and location of parent company SOLVAY s.a. - Brussels - Belgium Your address Rue du Prince Albert, 33 B Brussels Belgium Your address: -open reply- michel.bande@solvay.com Short description of the general activity of your organisation / company: Solvay is the parent of a group of companies which are internationally active in the research, development, production, marketing and sale of chemicals and plastics. Solvay has a worldwide presence in 50 countries, over the 5 continents, with an expanded presence in Asia, the Americas and Eastern Europe. For further information please see : Is your organisation registered in the Interest Representative Register? If your organisation is not registered, you have the opportunity to register here before you submit your contribution. Responses from organisations not registered will be published separately from the registered organisations. -single choice reply- Please specify the Register ID number in the Interest Representative Register - open reply

2 Page 2 of 5 Can the Commission contact you if further details on the information you submitted is required? -single choice reply- Publication: Do you object to publication of the personal data on the grounds that such publication would harm your legitimate interests? -multiple Questionnaire 1. How would you consider the current regime of disclosure of nonfinancial information applicable in your country? -single choice reply- Poor In replying to this question, please provide information on what way current reporting provides useful information, and to what extent it is sufficiently tailored to the circumstances of the company. Please also comment on whether you find non-financial information useful for the decision-making of a company. We receive an annual questionnaire from the SPF Economie (Service Public Fédéral). The purpose, the procedure and relevance are unclear. 2. Have you evaluated the effects, and costs and benefits, of any current corporate disclosure of environmental and social information? -single choice reply- Solvay has been disclosing non-financial information for nearly 20 years. The first environmental report was published in Cost has increased with the amount and complexity of information disclosed. The disclosure has increased both in volume and in complexity. Part of this increase is due to external stakeholder s demand (for example social rating agencies), and part is due to the deployment of fully-fledged sustainability strategy adopted by Solvay on which we report internally and externally. In general the benefits of disclosure are evaluated as positive. 3. If you think that the current regime of disclosure of non-financial information should be improved, how do you suggest that this should be done? Solvay would support a European-wide framework on CSR, and considers the following elements to be important: A harmonized European framework should prevent a patchwork of different national requirements. A harmonized framework should prevent that companies that operate in more than one member state would need to comply with various national requirements. To the extent possible, a company should be able to report on a consolidated basis preventing a company to make various national publications. However, we acknowledge that the process for consolidation and integration of non-financial data should be further developed. The Europeanwide framework should initially require a company to report on principles, for example on the 7 domains covered by ISO 26000, to the extent relevant for the reporting companies. Companies could on a voluntarily basis provide more detailed information to the extent available and relevant for the nature and scope of activities of the company. This initial framework could be developed overtime under the Commission s guidance by i) unifying general CSR concepts & definitions and ii) by requesting industries to design industry specific reporting sub-frameworks that would improve the materiality and comparability of the disclosure in a given industry sector. 4. In your opinion, should companies be required to disclose the following (check all relevant boxes): -multiple Whether or not they have a CSR policy, and if they do, how they implement that policy and what the results have been The principal business risks and opportunities arising from social and environmental issues, and how they are taken into account in company strategy. We consider that large companies need to disclose if they have a CSR policy and if not they should explain why. Companies constantly make risk assessment based on identifying and assessing risks and opportunities and adapt

3 Page 3 of 5 their strategy accordingly. However there is a difference between assessing risk and disclosing risks. Companies can be requested to explain how they assess risk but should not be required to disclose their risk. 5. In your opinion, for a EU measure Other on reporting of non-financial information to achieve materiality and comparability it should be based upon (check all relevant boxes): - multiple Other, please specify: -open reply- To achieve materiality and comparability, Solvay believes that an EU measure on reporting should take place on Principles and Key Management areas. Solvay does not consider KPIs appropriate for this kind of reporting as it considers that companies should be free to decide for themselves (together with their stakeholders) the most appropriate KPIs. Sustainable indicators are used by many companies to manage their own sustainability and correspond to strategic goals of the company. Companies should be free to report on a voluntarily basis on as many company objectives and indicators the company wants. Apart from reporting on Principles, Solvay could envisage that the EU measure on reporting would define, for each sector, a limited number of key management areas on which all companies of this sector should report as well as the procedure for reporting. For example the company would need to report on its strategy, objectives and indicators relating to the key management areas. In case a company would not report on certain key management areas, it would need to explain why not (comply or explain). The company would remain free to choose the most appropriate KPIs. 6. In your opinion, what should be the process to identify relevant principles and/or indicators (whether general or sector-specific)? In replying to this question, please comment on whether the Commission should endorse or make reference to any existing international frameworks (or a part of them), such as Global Reporting Initiative (GRI), UN Global Compact, the OECD Guidelines, ISO 26000, or other frameworks; or whether companies should be required to select relevant indicators together with their investors and other stakeholders and to disclose information according to such indicators, depending on the use that different stakeholders would make of such information. Different companies have chosen different reporting frameworks to report on sustainability. Choosing one framework as a mandatory framework for reporting would force companies to change their reporting system that they have developed over the years. Companies should be free to choose the appropriate framework. The legal requirement should not go further than the requirement to report on for instance - the 7 key domains of sustainable development developed in ISO on a consolidated and global basis. As indicated under question 3, industry specific reporting frameworks could be developed overtime by industry sectors under the guidance of the Commission to improve the materiality and comparability of reporting. 7. In your opinion, should companies be required to disclose the steps they take to fulfill the corporate responsibility to respect human rights? -single choice reply- In principle Solvay would support the idea for companies to report on their Human rights Policy. However, such reporting should take place on a consolidated and global basis and should only be required to the extent this issue is of relevance for the organization. Apart from the requirements to disclose information the EU should not set any further requirements with regard to Human Rights but should follow the international standard that are being developed by The UN Special Representative Professor John Ruggie. Also it should be noted that today probably less than 300 companies worldwide have a company statements that refers to the Universal Declarations of Human Rights (Source: Business & Human Rights Resources Centre) and therefore the request for disclosure might be premature. 8. In your opinion, should companies No be required to disclose the risks they face and the policies they have in the field of corruption and bribery? -single choice reply- Companies should not be required to disclose the risk they face in the field of corruption and bribery. From a commercial point of view such statement would not be recommendable and it should be left to NGOs to make statements about risks in certain countries and industries. Of course identifying risks and making risk assessments is part of the normal day-to-day business of a company. The risk of corruption and bribery will be one of the elements that will be taking into account in this assessment, amongst many other elements. Solvay

4 Page 4 of 5 would support the idea for companies to report on their anti bribery policy on a global basis and to the extent relevant for the company. 9. In your opinion, what companies Large companies (listed and non-listed) should be required to disclose nonfinancial information (check only one box)? -single choice reply- 10. In your opinion, should institutional investors be subject to specific or additional disclosure requirements, for example to disclose whether and how they take into account environmental and social issues in their investment decisions? -single choice reply- No In replying to this question, please provide information on which issues seem to be the most relevant and why; and which institutional investors should be subject to such an obligation. Taking into account that most institutional investors have no such obligations for their own investment decisions, it would be difficult to request this kind of disclosure from them only for ESG aspects. 11. In your opinion, should European policy promote the concept of "integrated reporting"? Integrated reporting refers to a report that integrates the company's key financial and non-financial information to show the relationship between financial and non-financial performance (environmental, social, and governance). -single choice reply- In replying to this question, please indicate the advantages and disadvantages of an integrated report, as well as possible specific costs of integrated reporting. Solvay would like to prevent numerous reporting obligations and would therefore prefer integrated reporting provided that the difference between financial data and non-financial data is taking into account. For example, a difference in precision can exist between financial and non-financial data or a difference of timing in the availability of the data. It should also be prevented that internationally operating companies would have various reporting obligations for non-financial data and therefore adequate consolidation methods should be developed. 12. In your opinion, should disclosed non-financial information be audited by external auditors? -single choice reply- No In replying to this question please provide any evidence you may have regarding costs of auditing non-financial information, as well as your views on other possible forms of independent reviews besides external auditing. Unless the audit would have an added value and be limited to issues material to the company. Verification of financial data is very different from the verification of non-financial data and requires a different expertise. At present, Solvay doubts whether there is sufficient expertise in the market place to justify that non-financial information be verified by external auditors. Solvay considers that at present the interaction with the various stakeholders sufficiently meets verification needs. It should be further noted that the application of existing norms by companies (e.g. ISO) provides de facto an answer to a number of non financial indicators. In that regard, auditing the quality of a collection system is more appropriate than auditing the value of the indicator itself.

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