4.2.4 Environmental matters

Neither the text of article 1.14 nor the text of any other articles of the Modernisation Directive give an explanation of what precisely should be included in the annual report in respect of environmental and employee matters'. These terms are very general in nature and it would have helped if they had been clarified and made more concrete in the Directive itself. However, the Preamble to the Modernisation Directive does refer to Commission Recommendation 2001/453/EC1 which contains examples of environmental issues that should be reported on, such as: the company's policy and programmes in respect of pollution prevention, avoidance of damage to flora and fauna, information on the use of energy and improvements that have been made in, for instance, the use of materials and waste disposal.2 An obligation to inform on the quantities of materials used, water and waste and on reductions thereof, implies that the non-financial information that is to be provided exceeds legal compliance issues. This type of information alludes to the question whether the company operates in a sustainable way, respecting and taking into account the P of Planet. Consequently, the new reporting obligation refers to the way in which a company demonstrates corporate social behaviour and thus whether or not the company follows best practices in its decision making processes.