Non-financial information of Hotel Establishments towards total corporate transparency

The end of the year is approaching, for which, according to the Commercial Code, the directors of the companies are obliged to prepare within a maximum period of three months (December 31, unless otherwise stipulated in the bylaws) the annual financial statements, the proposed allocation of profits and the management report, which must include, where appropriate, the statement of non-financial information.

More and more companies are publishing non-financial information through sustainability reports, management reports or other types of reports, making Spain a benchmark in terms of disclosure of non-financial information and diversity, with a greater demand for transparency and reliability in the reporting of this type of data.

But what does this non-financial information consist of and how does it affect hotel groups?

Directive 2014/95/EU of the European Parliament and the Council, was born with the objective of identifying risks to improve sustainability and increase the confidence of investors, consumers and society in general.

As of the entry into force of Law 11/2018, of December 28, which updates the provisions of the Royal Decree Law transposing the aforementioned Directive, the aim is to contribute to measuring, monitoring and managing the performance of companies and their impact on society.

The consolidated statement of non-financial information shall include the information necessary to understand the evolution, results and situation of the group, and the impact of its activity with respect to environmental and social issues, human rights, the fight against corruption and bribery, as well as those relating to personnel, including, where applicable, the measures adopted to favor the principle of equal treatment and opportunities between women and men, non-discrimination and inclusion of persons with disabilities and universal accessibility.

In this sense, for example, with regard to environmental issues, the statement should include detailed information on the current and foreseeable effects of the hotel group's activities on the environment and, where appropriate, health and safety, the use of renewable and/or non-renewable energy, greenhouse gas emissions, water consumption and atmospheric pollution. All of these are aspects to be taken into account, depending on the location where the group's hotels are established.

With respect to social and personnel issues, the information provided in the statement may refer to measures taken to ensure gender equality, implementation of fundamental International Labor Organization conventions, working conditions, social dialogue, respect for the right of workers to be informed and consulted, respect for trade union rights, health and safety in the workplace, and dialogue with local communities and measures taken to ensure the protection and development of these communities.

This is essential information, since the work of hotel employees is a reflection of the treatment offered to them as workers, and therefore will ultimately have an impact on the data provided in the management report.

The same applies to the information to be reported with respect to human rights, the statement of non-financial information may include information on the prevention of human rights violations and, where appropriate, on measures to mitigate, manage and redress possible abuses committed.

Finally, with regard to the fight against corruption and bribery, the statement of non-financial information shall report information on the existing instruments to fight against them, i.e., for example, the figure of criminal compliance, incorporated into its structure directly, or through the contracting of companies specialized in it.

Non-financial information must be reported by companies in which the following requirements are met:

55. The average number of employees employed by the companies in the group during the year is greater than 55.
56. That either have the consideration of Public Interest Entities, or, during two fiscal years, meet two of the following circumstances:
57. That the total of asset items exceeds 20 million euros.
58. The net amount of the annual turnover exceeds 40 million euros.
59. The average number of employees during the fiscal year exceeds 250.

According to the Law, the information provided must be verified by an independent provider of verification services or KPI. This provides evidence that the statement of non-financial information is free of any error, providing credibility and, of course, reliability.

Once this statement of non-financial information is presented, through the management report, it must be subject to the same criteria for approval, filing and publication as the annual accounts.

This measure, in compliance with Spanish and European regulations, contributes to greater transparency in compensation and promotes equality, inclusion and non-discrimination, making it more than essential for the transition to a sustainable global economy that is profitable in the long term and achieves harmony with social justice and environmental protection.

Pilar Mata (Lawyer T&L)

Article published in the December edition of the monthly newspaper CEHAT