Our Group Legal department continuously monitors and assesses requirements arising out of the applicable legal framework, and it evaluates legally relevant changes and their implications for internal processes and policies. Ongoing legal monitoring is carried out for particularly relevant compliance issues by various specialist departments.
A significant change in the legal framework conditions relating to environmental or social aspects was the entry into force in 2017 of the CSR Directive Implementation Act. This requires consistent reporting by companies on environmental, social and employee matters as well as on human rights and combating corruption. The legislation defines the type of information to be disclosed and the group of affected enterprises, banks and insurers in Germany. In March 2018 we published our Non-Financial Information Statement for the first time as part of our Annual Report 2017. In so doing, we are in compliance with the new CSR Directive Implementation Act.
The Act for the Equal Participation of Women and Men in Leadership Positions in the Private Sector and the Public Sector, which had already entered into force in 2015, required the Supervisory Board of the company to define a target quota for women on the company's Supervisory Board and Executive Board in the period until 30 June 2017 by no later than 30 September 2015. In view of the fact that the deadline for achievement of the current target ended in the year under review, the Supervisory Board was obliged to set a new target quota for women. For the period from 1 July 2017 to 30 June 2022 the Supervisory Board has therefore set a target quota of 30% for women on the Supervisory Board and 14% on the Executive Board.
For each of the two levels of senior management below the Executive Board, the company's Executive Board increased the previous target from 16.8% to 18% for the same period.
By means of the Act on Partial Implementation of the European Energy Efficiency Directive dated 15 April 2015 the Federal Republic of Germany enacted into law the mandatory conduct of regular energy audits at large enterprises. Under the legislation, large corporations that have a turnover of more than EUR 50 million and employ more than 250 staff are required to conduct an energy audit for the first time by no later than 5 December 2015 and every four years thereafter. An exemption from the obligation to carry out an energy audit is available solely for companies that have an energy management system in accordance with DIN EN ISO 50001 or for those that have successfully implemented a validated environmental management system as defined by the regulation, specifically the EMAS III Regulation, or have concrete plans to do so by the stipulated deadline. With this in mind we decided in 2015 to convert the existing environmental management system according to DIN EN ISO 14001 to the more comprehensive environmental management system EMAS in 2016. We publish an annual EMAS environmental statement in accordance with the EMAS III Regulation (Eco-Management and Audit Scheme) in the EMAS Register and on our website.
As a globally operating reinsurance undertaking, we are subject to the tax laws of the respective national legal systems. We pay the incurred taxes according to the applicable legal provisions of the countries in which we operate.
The tax expenditure of the Hannover Re Group recognised in the IFRS consolidated financial statement for the 2017 financial year was EUR 143.2 million lower than in the previous year at EUR 248.0 million (previous year: EUR 391.2 million). Along with the reduced pre-tax profit compared to the previous year, this is due among other things to changes in future applicable local tax rates in the United States and France and the associated remeasurement of deferred tax liabilities. In addition, the effective tax rate decreased compared to the previous year due to realisations of non-strategic listed equities and equity funds. The effective tax rate amounted to 19.2% (24.2%). A breakdown of domestic and foreign taxes on income is provided in our Annual Report.
In order to ensure that going forward, as in the past, we continue to file complete and correct tax returns on a timely basis despite the growing complexity of tax claims from our international operations, we are currently working on implementation of a "Tax Compliance System". In this regard it is necessary to identify all relevant task areas and responsibilities, set out clear rules for them in a company-wide guideline and translate them into practice in the context of processes. A tax strategy was also adopted in this connection in 2017. This is published on our website.
In addition, the handling of tax matters within Hannover Re is regulated by internal Group guidelines and organisational guidelines.