The obligation of non-financial reporting by companies as a mechanism for the protection of human rights in horizontal relations

Type of project: Problem-based learning for students in the work environment: economy, non-economy, and non-profit sector in the local/regional environment 2024-2027 - PUŠ in the work environment 2024/2025

Project title: The obligation of non-financial reporting by companies as a mechanism for the protection of human rights in horizontal relations

Field addressed by the project: 04 – Business and administrative sciences, law

Lead educational mentor: doc. dr. Jaka Kukavica

Working mentor: Marija Urankar, LL.

Students involved:

• 4 students of the undergraduate program in Law
• student of the second cycle of the postgraduate program in Law
• student of the second cycle of the postgraduate program in Banking and Financial Management
• student of the higher education professional program at the Higher Business School
• Student of the higher education professional program in Computer Science and Informatics

Financers:

The project contributes to the achievement of these objectives in several ways. Through in-depth research supervised and guided by both a theoretical-methodological perspective (pedagogical mentor Dr. Jaka Kukavica) and a practical perspective (work mentor Matija Urankar), the key competencies of gifted students are strengthened. Language and entrepreneurial competencies, functional reading literacy, and critical thinking are strengthened. Through a focused, purposefully selected research topic on the obligation of non-financial reporting by companies, which is inextricably linked to the protection of individuals' human rights in supply chains around the world, the project also advances global learning and learning for sustainable development.

The project also contributes to the goal of strengthening the relevance of the education system to the labor market by providing students with practical insight into topics neglected in the regular curriculum of law programs.

The project aims to prepare a legal handbook for law firms and consultants who will advise companies and train auditors on the obligation of companies to report on sustainability and human rights, and to prepare a questionnaire to serve as a guide for companies that are required to prepare non-financial reports on business sustainability and human rights protection. In this way, students gain essential practical experience and knowledge through insight into the workings of law firms and the economy, which they would not be able to obtain in the regular study process. This also results in a significant transfer of knowledge between the working environment and the higher education system, with the latter enriching the project's practical approach with the analytical nature of the scientific-methodological approach. By acquiring useful knowledge and experience and expanding their legal network, students also improve their employability and facilitate their transition into the working environment after graduation.

In December 2022, the European Union (EU) adopted Directive 2022/2464, which significantly changes and upgrades the existing rules on non-financial reporting obligations of companies in relation to sustainability and the protection of human rights. The Directive entered into force in 2023, and the obligations for companies will take effect in 2025, 2026, and 2028, depending on the company's size. On the basis of the aforementioned Directive, the European Commission also issued Commission Delegated Regulation (EU) 2023/2772 of 31 July 2023, supplementing Directive 2013/34/EU of the European Parliament and of the Council on sustainability reporting standards, which further specifies the provisions of the aforementioned Directive. In the coming years, this legal framework will significantly change the rules and scope of non-financial reporting obligations related to sustainability, environmental impact, and human rights protection for many companies operating in the Republic of Slovenia. The project addresses these developments using a legal methodology (under the supervision of academic mentor Doc. Dr. Jake Kukavica) to develop professionally and practically applicable knowledge (under the supervision of work mentor Matija Urankar). To precisely define companies' obligations, the project team conducts a detailed analysis of new legal acts. It prepares a carefully compiled, substantiated overview of factors related to sustainability and the protection of human rights that companies will have to report on in the future. Particular emphasis is placed on indicators that companies will use to measure their compliance with sustainability principles and human rights in their operations.