This paper analyses the possible links between the precautionary principle – as interpreted by the European Commission and the European Court of Justice and broadly employed for health and environmental protection – and the listed companies duties of risk reporting and forward-looking information disclosure. Taking into consideration that the IAS/IFRS and the European frameworks are already strewn with rules concerning forward-looking information, the paper proposes to apply the precautionary principle to this information, analysing the possible issues arising from the proposal and the related solutions. Positive effects of a disclosure regime based on the precautionary principle emerge: an increase in transparency in the financial markets, a unique interpretation criterion in the doubtful cases, incentives to careful risk monitoring and timely intervention also in situations of persistent scientific uncertainties and encouragement of effective public and private enforcement.
European Business Law Review