In this article, you will learn how initiatives included in Observe are selected and validated.
Observe focuses on initiatives which contain corporate disclosure requirements. This includes regulations with provisions that require companies to issue non-financial reports or simply disclose any non-financial information to governmental and non-governmental entities, or to the general public.
Disclosure requirements are an effective proxy to identify topics that, according to policy-makers, are material to companies.
In addition, the database tracks regulations which do not necessarily have disclosure requirements, but are helpful to the understanding of the current regulatory development surrounding non-financial issues.
A summary of each regulatory initiative is immediately available and provides a high-level description of the initiative’s legal text, the type of regulator, a link to the original source(s), and an overview of the non-financial topics referenced in the initiative.
This summary is compiled by our regulatory team, after having gathered essential information and analyzed the provisions of the text, with the help of Datamaran’s automated language processing system.
Each initiative is tagged according to its geographical scope, its legally binding force, the targeted entities, the sanctions associated and the sectors concerned. The initiatives are classified as either mandatory, conditionally mandatory, or voluntary:
- Mandatory initiatives include binding requirements, known commonly as hard law.
- Conditionally mandatory initiatives are regulations that are mandatory when certain criteria are met; for example, company type or size.
- Voluntary initiatives are not binding, but are instead recommended and are commonly known as soft law.
Each initiative is tagged according to the relationship it has with other initiatives in our database. Through the tag ‘related initiatives,’ Observe informs us whether an initiative amends, implements, transposes or repeals another initiative.
Initiatives outside of Observe’s database scope include:
- Regulations not directly related to corporations, businesses and/or financial entities.
- Strictly technical regulations.
- Regulations that address rights and obligations for states and/or state organizations only.
- Regulations that address supervisory bodies.
- Regulations no longer in force.