For years, the sustainability report was a communication document. Since it is prepared under standard, verified by a third party, and published alongside the accounts, it has become something different: corporate information for which the signatory is responsible.
What changes when it becomes mandatory and verifiable
Data published under standard, with external verification and the dual materiality perspective, has legal consequences that a corporate brochure did not have. It ceases to be a statement of intentions and becomes a declaration about the company's situation, comparable in its treatment to financial information.
The avenues of claims that open up
Three, in order of probability. Administrative sanction for non-compliance or for misleading information. Claim from a third party who contracted, invested, or financed based on data that turned out to be inaccurate. And social responsibility action promoted by partners when non-compliance results in sanction or loss of contracts. All three are directed at the person of the administrator, not just the company.
The supply chain effect
The obligation propagates downwards. The obligated company needs data from its suppliers to report, so it demands them by contract. Many companies that are not subject discover that they must answer for the accuracy of the information they provide to their client, and with it, they assume contractual responsibility without having changed anything in their internal governance.
What to review in the D&O policy
That the definition of wrongful act includes public statements of the company. That there is cover for investigation expenses prior to the filing of a claim, because the administrative procedure begins before there is a lawsuit. And that the defence cover extends to sanctioning procedures of supervisory bodies, which is where the first files arrive.
