Non-financial reporting is prepared, as a rule, by large companies to present social processes and the results of their activities as a mandatory form for their annual financial statements. Interest in publishing non-financial reporting on a voluntary or expanded basis has been noted recently due to attention to environmental and social agendas. About the main parameters of non-financial reporting in Poland and EU countries - further.

Forming and submission of non-financial reporting, is mandatory due to legal requirements for companies whose securities are quoted on stock exchanges, financial institutions, energy and other corporations whose activities may affect the environment or have other publicly significant consequences.

Non-financial reporting is prepared in order to increase corporate transparency, productivity, and the use of sustainable approaches in their activities. The main sections of non-financial reporting can be focused on the principles of ESG - environmental social governance.

Formation and submission of non-financial reporting in Poland is administered by the provisions of the Accounting Law of September 29, 1994, which are in line with Directive 2014/95/EU on non-financial reporting. Since 2018, Polish companies have been submitting a statement of non-financial information along with their annual financial statements.

The non-financial reporting provisions apply to large public interest companies in Poland that employ more than 500 employees and meet one of two financial conditions: the value of the total assets of the balance sheet is more than PLN 85 million at the end of the financial year or more than PLN 170 million net proceeds from the sale of goods (works, services) for the financial year. Among those submitting non-financial reporting are companies whose shares and securities are quoted on the stock exchange, banks, insurance companies and others.

According to the requirements, the reporting of companies must contain a description of their business model and policies applied in relation to social, labour, environment, respect for human rights and combating corruption. Companies also report on the results of applying these policies and the risks associated with them, as well as methods for managing these risks. The key non-financial performance indicators of the company's activities are given, including their connection with the annual financial statements.

When preparing a report on non-financial information, a company may apply any rules, including its own rules, national, European or international standards, norms or guidelines.

Regulation of non-financial reporting in the EU is currently carried out in accordance with Directive 2014/95/ЕС. In addition to the above provisions governing non-financial reporting in Poland, it should also be noted that companies may be exempted from preparing a non-financial report in accordance with the Directive if non-financial information is published together with a management report or becomes publicly available within six months after the reporting date on the website companies.

In the development of Directive 2014/95/EC on non-financial reporting, guidelines on non-financial reporting (methodology for reporting non-financial information) with examples and KPIs.

Due to the growing social and environmental issues, the development of a culture of transparency regarding the activities in relation to these problems, the provision of non-financial reporting is expanding. Since 2003, the Corporate Sustainability Reporting Directive (CSRD) has come into force. A wider range of large companies, as well as listed SMEs, will be required to report on sustainability - some 50,000 companies in the EU in total. This Directive shall enter into force in the Member States within 18 months to replace the existing regulation; from 2025, the publication of non-financial reporting will be carried out according to the new rules.

Companies subject to the CSRD will have to report in accordance with the European Sustainability Reporting Standards (ESRS), which will be adopted by mid-2023 based on previously published draft standards.