The Legislative Decree n°254/2016: the role of the Integrated Report by Sara Cirone.
Tuesday 28th October 2017. At the Lecture Hall of the Department of Economy and Management of the University of Ferrara, we have participated in the meeting “Evoluzione del bilancio aziendale: la dichiarazione non-finanziaria ex D. Lgs. n° 254/2016 e il Reporting Integrato. Percorsi innovativi della rendicontazione d’impresa” (“Evolution in the corporate balance sheet: the non-financial statement of the Legistative Decree n°254/2016 and the Integrated Report. Innovative modalities of the corporate accounting”).
The collaboration between the NIBR – Network Italiano Business Reporting (“Italian Network of Business Reporting”), of ANDAF, Associazione Nazionale Direttori Amministrativi e Finanziari della Sezione Emilia-Romagna e della Sezione Nordest (“National Association of Administrative and Financial Directors of the Emilia-Romagna Section and North-East Section) and the Department of Economy and Management of the University of Ferrara has concretely made the event possibile.
Speakers at the Convention:
Stefano Zambon, Laura Girella, Andrea Panizza, Raffaele Trivellato, Sara Cirone, Andrea Ragazzini, Daniele Giorgetti.
The Legislative Decree n° 254/2016
The legislative decree of 30th December 2016, n. 254 transposes and applies the 2014/95/UE directive of the European Parliament and the Council of the 22nd October 2014 about “the communication of non-financial information and diversified information of some business companies and some groups of large dimensions”. In other words, this legislation establishes that all the instutions of public interest and the business companies with at least 500 employees have the obligation to present a non-financial statement if – once their balance sheet is completed – they have exceeded these dimensional limits: a) total statement of assets and liabilities amount: 20.000.000 Euros; b) total net income from sales and performances: 40.000.000 Euros.
The presentation on voluntary basis of a non-financial statement from other business companies without the requested conditions is not excluded, but actually made possible by this legislation: in this respect, for the Small and Medium Enterprises the legislative decree introduces simplified formulations.
The themes of non-financial accounting
Various risks and threats of the global context represent a highly likely scenery for the civilization. The growth of these risks and threats was in concomitance with the development of this economic model. They now request a more general attention and cannot only be delegated to the good and isolated actions left to the individual intention of virtuous business companies with a perspective vision. A change of perspective is now necessary as well as the voice for permanent and comparable parameters for corporate strategies that have compatibility with the environment, territory, community and people.
Therefore, the legislative decree establishes some fundamental themes for the non-financial accounting: environment, society, people at work, respect of human rights, struggle against the active and passive corruption. Today business organizations should account and communicate these themes to their own stakeholders with transparency, clarity and – most of all – responsibility towards the civilization itself.
In particular, the legislative decree establishes the minimum areas of accounting of the corporate activities and performances: use of energetic resources from renewable and not renewable sources, use of water resources, greenhouse and air-polluting gas emission, environmental impact, health, safety and associated risks, social aspects in the personnel management and in the dialogue with social parts, human rights respect, prevention from their violations and discriminations, struggle against corruption.
On the other hand, the choice of the model of accounting, the key performance indicators, the methods of calculation to use depend on the business organization: the non-financial accounting could result hardly uneven for the absence of indications that fix standard parameters.
The Integrated Report and the Humanistic Management
These themes should cease to be delegated arbitrarily to the good commitment of some virtuous business organizations: for this reason, according to the State, the intervention in this direction and through this Decree was fundamental. In this respect, the introduction of innovative technical intruments is essentially important in order to implement parameters that are sensitive to the intangible aspects and the corporate value creation. The Integrated Report can be a key instrument to evaluate, measure, communicate these non-financial aspects of the corporate activity. The Integrated Report is an appropriate instrument for an equally innovative management that is attentive to the environmental, community, social and human aspects: a humanistic management that helps the development of civilization. A management of a business organization that is composed by people who actively participate in the real corporate process of business organizations that effectively becomes the new employees’ habitat of life.
Towards a new model of management
In reference to themes of the Decree, the accounting of the non-financial aspects of the business organization should contain all the necessary information to understand the corporate management and organisational model of the activities of the business organization. In this respect, the Legislative Decree 254/2016 vehicles and promotes a deep corporate change where the management model is attentive to the aspects of sustainability and the role of the intangible resources. In fact, the non-financial accounting is different from the financial one because it contains the information in relation to the more comprehensive concept of the value creation, by connecting all the information expressing the corporate process of value creation.
Therefore, the Integrated Report can fully become a fundamental instrument of sense making aiming at reporting the activity of the business organization in the short, medium and long term. The humanistic model of management is capable to use this instrument in order to collect all the relevant information about the non-financial and intangible aspects. In fact, the Integrated Report communicates the information about: Financial Capitals (Financial and Material Capital), Intangible Capitals (Organizational Capital, Relational and Social Capital and Human Capital) and Sustainable Capitals (Natural Capital). As a consequence, with the Integrated Report, the activity of business organizations aims to reach the UN objectives for the Sustainable Development in full compliance with a sustainable perspective.
The opportunity of positive change and a new awareness
Therefore, the Decree marks a difference and a definitive change in the contexts where a business organization acts: a new awareness of environment, community and people, the present necessity to adopt an instrument of accounting that is sensitive to the non-financial aspects, the innovative role of a business organization addressed to the value creation and a new humanistic management in full compliance with the sustainable perspective.
The Decree inaugurates a new awareness and growth as strong elements of competitiveness and quality of corporate performances for all the business organizations that head for a further development of civilization.