How is Corporate Reporting Evolving in Europe?

CSR Europe welcomes the new Corporate Sustainability Reporting Directive and EU Taxonomy on Climate.
Some elements, however, still need further alignment with other policy packages and improvements.
A summary outlining the impact on businesses will be provided to corporate members in the new, exclusive newsletter Sustainability Booster.

On 21st April, the European Commission published a package of measures that include the proposal for the new Corporate Sustainability Reporting Directive (CSRD) and the Delegated Acts for Climate Taxonomy, to boost the transition towards climate neutrality in line with the Green Deal. Both measures introduce new reporting requirements aimed at making companies accountable for and transparent about their impact on people and the environment. These improved reporting practices will also help companies to attract more sustainability-related investment, enabling investors to re-orient capital towards more sustainable technologies and businesses.

A summary of the package and the implications for businesses will be shared with CSR Europe corporate members on 13th May, as part of “Sustainability Booster” - the corporate-members only newsletter where the policy analysis you rely on and the tools you need to advance on sustainability come together in a practical, ready-to-use format.

WHAT IS NEW?

Compared to the Non-Financial Reporting Directive (NFRD) sustainability reporting requirements, the main novelties of the CSRD proposal are:

The extended scope
All large companies and all companies listed on regulated markets, except listed micro-enterprises, will have to comply to the CSRD.
The required assurance of reporting information.
More detailed requirements on the content of the reported information, also in light of the development of a mandatory EU sustainability reporting standard and of the EU Taxonomy
The digital format
Data will have to be machine-readable.

Companies who fall under the scope of the CSRD directive will be required to also disclose their impact on climate in line with the EU Taxonomy on Climate Mitigation and Adaptation, adopted this April. At the same time, they will have to disclose the proportion of their turnover, capital expenditure, and operating expenditures derived or associated with economic activities that qualify as environmentally sustainable and substantially contributing to climate mitigation and adaptation.

WHAT IS CSR EUROPE’S POSITION?

CSR Europe welcomes the new Corporate Sustainability Reporting Directive and EU Taxonomy on Climate. The review largely meets the call of CSR Europe’s members to bring disclosure to the next level, with a revision that is not anymore about non-financial reporting but sustainability reporting.

CSR Europe largely supports the proposed structure and location of the sustainability information in the financial report. Also, the enlargement of the scope of the directive creates a wider level playing field among companies.

In our view, however, the following elements still need further alignment with other policy packages and improvements: