Corporate Disclosure in the EU: A Means to an End?

ACKNOWLEDGEMENTS  III

TABLE OF CONTENTS  V

LIST OF ABBREVIATIONS  XIII

INTRODUCTION

A. Setting the Scene  1

B. Research Questions  3

CHAPTER 1

FOUNDATIONS

A. Terminology  7

I. Information  7

II. Disclosure  10

III. Reporting  11

IV. Transparency  13

B. Historical Developments  15

I. United Kingdom    15

1. Financial Reporting  15

2. Non-Financial Reporting  20

II. USA   21

1. Financial Reporting  21

2. Non-Financial Reporting  27

III. International Developments  29

1. Financial Reporting  29

2. Non-Financial Reporting  31

IV. European Union  37

1. Financial Reporting  37

2. Non-Financial Reporting  50

V. Türkiye  56

1. Financial Reporting  56

2. Non-Financial Reporting  59

C. Rationale for Transparency Requirements  63

D. Limits to Transparency  72

I. Fundamental Rights  73

II. Trade Secrets  87

III. Competition  92

IV. Data Protection  97

CHAPTER 2

DISCLOSURE UNDER COMPANY LAW AND DISCLOSURE OF FINANCIAL INFORMATION

A. International Financial Reporting Standards  107

I. Content of Disclosure and In-Scope Companies  107

II. Form and Period  110

III. Addressee and Aim of Information  111

B. European Union  111

I. Disclosure Under Company Law   112

1. Company Law Directive  112

a. In-Scope Companies  112

b. Content of Disclosure  114

aa. General Rules for Companies  114

aaa. Article 14 CLD   114

bbb. Provisions on Capital Maintenance and Alteration  119

ccc. Other Provisions  121

bb. Branches  122

cc. Merger, Conversion and Division  124

c. Form and Period  126

d. Addressee of Information  130

e. Aim of Disclosure  133

f. Assessment 139

2. Accounting Directive  142

a. Content of Disclosure  143

aa. Annual Financial Statements  143

bb. Management Report 146

cc. Auditor’s Statement 148

dd. Payments to Governments  148

b. Form and Period  149

c. In-Scope Companies  152

d. Aim of Disclosure  155

e. Addressee of Information  157

f. Assessment 157

II. Disclosure Under Capital Markets Law   160

1. Prospectus Regulation  160

a. Content of Disclosure  161

aa. In General 161

bb. Summary  167

cc. Risk Factors  168

dd. Future Performance  169

ee. Simplified Prospectus  169

b. Form and Period  172

c. In-Scope Companies  174

d. Addressee of Information  180

e. Aim of Disclosure  188

f. Assessment 190

2. Transparency Directive  191

a. Content of Reporting  191

aa. Annual Financial Reports  194

bb. Half-Yearly Financial Reports  196

cc. Payments to Governments  198

dd. Major Holdings  198

ee. Additional Information for Security Holders  201

b. Form and Period  202

c. In-Scope Companies  213

d. Aim of Reporting  216

e. Addressee of Information  222

3. Shareholder Rights Directive  224

a. Content of Disclosure  224

aa. Information Prior to the General Meeting  225

bb. Remuneration  226

cc. Related Party Transactions  228

dd. Voting Results of the General Meeting  233

b. Form and Period  233

aa. Information Prior to the General Meeting  234

bb. Remuneration  236

cc. Related Party Transactions  237

dd. Voting Results of the General Meeting  237

c. In-Scope Companies  238

d. Addressee of Information  239

e. Aim of Disclosure  241

4. Market Abuse Regulation  243

a. Content of Disclosure  244

aa. Inside Information  245

aaa. In General 245

bbb. Precise Information  247

ccc. Price Effect 249

ddd. Protracted Processes  253

bb. Selective Disclosure  256

cc. Disclosure Obligation  257

dd. Managers’ Transactions  261

b. In-Scope Companies  263

c. Form and Period  266

d. Grounds for Delay  270

e. Aim of Disclosure  272

f. Addressee of Information  279

g. The Interaction of the Market Abuse Regulation with Other Disclosure Rules  286

C. Corporate Disclosure as a Successful Regulatory Instrument?  289

I. Need for Information  290

II. Which Investors?  294

III. Need for Standardisation  297

CHAPTER 3

DISCLOSURE OF NON-FINANCIAL INFORMATION

A. International Standards  303

I. Global Reporting Initiative Standards  303

1. Content of Disclosure and In-Scope Companies  304

2. Form and Period  305

3. Addressee and Aim of Information  306

II. Task Force on Climate-Related Financial Disclosures  308

1. Content of Disclosure and In-Scope Companies  308

2. Form and Period  309

3. Addressee and Aim of Information  309

III. IFRS Sustainability Disclosure Standards  311

1. Content of Disclosure and In-Scope Companies  311

2. Form and Period  317

3. Addressee and Aim of Information  318

B. European Union  319

I. Corporate Sustainability Reporting Directive  319

1. Content of Reporting  321

a. In General 321

b. Information About the Value Chain  329

c. Assurance Report 332

d. Information Required by the Taxonomy Regulation  334

e. Remuneration of the Board of Directors  335

2. Form and Period of Reporting  336

a. Form    336

b. Period  340

3. In-Scope Companies  341

4. Aim of Reporting  344

5. Addressee of Information  347

II. Substantive Legislative Acts Mandating Disclosure  350

1. Corporate Sustainability Due Diligence Directive  351

a. Content of Disclosure and In-Scope Companies  351

b. Form and Period  353

c. Addressee and Aim of Information  353

d. Assessment 356

2. Regulation on Deforestation  357

a. Content of Disclosure and In-Scope Companies  357

b. Form and Period  359

c. Addressee and Aim of Information  360

3. Conflict Minerals Regulation  363

a. Content of Disclosure and In-Scope Companies  363

b. Form and Period  367

c. Addressee and Aim of Information  367

d. Critique  368

4. Batteries Regulation  371

a. Content of Disclosure and In-Scope Companies  371

b. Form and Period  375

c. Addressee and Aim of Information  375

III. Disclosure of Non-Financial Information under the Capital Markets Law   377

1. Prospectus Regulation  377

a. Content of Disclosure and In-Scope Companies  377

aa. In General 377

bb. Incorporation by Reference  383

b. Form and Period  384

c. Addressee and Aim of Information  385

2. Transparency Directive  386

a. Content of Disclosure and In-Scope Companies  386

b. Form and Period  389

c. Addressee and Aim of Information  390

3. Market Abuse Regulation  390

a. Content of Disclosure and In-Scope Companies  390

b. Form and Period  393

c. Addressee and Aim of Information  393

IV. Disclosure of Non-Financial Information as a Successful Regulatory Instrument?  394

1. Is the Due Diligence Framework Coherent?  394

2. Is Mandatory Disclosure Fit for Purpose?  397

3. Is the CSRD Coherent?  398

CONCLUSION   403

BIBLIOGRAPHY   409