Image by Wix Media.
At the end of November 2022, the EU council decided on the Corporate Sustainability Reporting Directive (CSRD), requiring companies to report their sustainability practices publicly. Sustainability reporting is the company's disclosure and communication of environmental, social, and governance goals and its progress towards them. With CSRD, the EU council aims to increase corporate accountability, prevent varying sustainability standards, and improve the transition towards a sustainable economy. Furthermore, CSRD will strengthen the existing rules and introduce more detailed reporting requirements. EU commission decided on the directive to prepare investors, shareholders, banks, and other stakeholders to have a clear view when making new decisions on sustainability matters.
Who will be obligated to CSRD?
This will be large companies and SMEs listed on regulated markets and those with specific characteristics; moreover, businesses are obligated to assess information related to their divisions in addition. The exception will be only companies in the transition period until 2028. Ministry for Industry and Trade promised that the new extended requirements would be tailored to different company sizes and provide them with a necessary transition period to prepare for the new obligations.
Corporations would be required, among others, to report
- on how their business model affects sustainability
- on sustainability matters like environmental, social and human rights and governance factors.
- data on the environmental and societal footprint and
- how external sustainability factors like climate change influences their businesses.
When will CSRD apply?
The application will be in four stages, starting with reporting in 2025 on the financial year 2024 for companies already subject to the non-financial reporting directive.
A full article and detailed CSRD document can be found here.
Comments