Filip Gregor
Head of the Responsible Companies Team
We have analysed hundreds of pages of technical documents and prepared a comprehensive overview of the sustainability reporting requirements under the forthcoming EU legislation. We summarise what ESG data will be critical for companies, banks, and investors in sustainability strategy and management and in the areas of climate change, environment, sustainable activities, employees and supply chains, due diligence, and anti-corruption measures.
In the integrated overview, we present the requirements of the Sustainable Finance Disclosure Regulation (SFDR), Corporate Sustainability Reporting Directive (CSRD, the reform of the Non-Financial Reporting Directive), and the Regulation on Taxonomy of Sustainable Activities.
Currently, only large listed companies, banks, and insurance companies with more than 500 employees have to report sustainability data. The CSRD proposal, introduced in April 2021, extends the scope to all large companies and SMEs listed on stock exchanges, except for microenterprises. Investors and other financial market participants must also disclose sustainability data under the SFDR. The rules for companies and investors are complemented by regulation on a framework to facilitate sustainable investments - Taxonomy. Standards will be developed for both the SFRD and the Taxonomy to clarify specific technical details and criteria.
The final drafts of these standards are clearly summarised in the integrated overview by Frank Bold:
The European Parliament has adopted the Corporate Sustainability Reporting Directive (CSRD), which clarifies transparency obligations for large companies operating in the EU on their sustainability impacts, risks, and opportunities. Pursuant to the CSRD, companies across all sectors will report against the European Sustainability Reporting Standards, which were developed by the European Financial Reporting Advisory Group (EFRAG), submitted to the European Commission and published on 22 November.
NGOs and civil society groups will only support an ambitious first set of sector-agnostic ESRS that closely builds on the EFRAG drafts adopted last November. They urge the Commission to follow EFRAG’s technical advice alongside 60+ companies and investors worth 651bn USD, and caution against making significant changes at this stage, as this would risk discrediting the process so far and undoing a good compromise.
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