The standards will be tailored to EU policies, while building on and contributing to international standardisation initiatives. The draft standards are developed by the EFRAG, previously known as the European Financial Reporting Advisory Group, an independent body bringing together various different stakeholders. The first companies will have to apply the new rules for the first time in the 2024 financial year, for reports published in 2025.Ĭompanies subject to the CSRD will have to report according to European Sustainability Reporting Standards (ESRS). Finally, reporting costs will be reduced for companies over the medium to long term by harmonising the information to be provided.
They will also create a culture of transparency about the impact of companies on people and the environment. The new rules will ensure that investors and other stakeholders have access to the information they need to assess investment risks arising from climate change and other sustainability issues. A broader set of large companies, as well as listed SMEs, will now be required to report on sustainability – approximately 50 000 companies in total. This new directive modernises and strengthens the rules concerning the social and environmental information that companies have to report. On 5 January 2023, the Corporate Sustainability Reporting Directive (CSRD) entered into force. New rules on corporate sustainability reporting: The Corporate Sustainability Reporting Directive This helps investors, civil society organisations, consumers and other stakeholders to evaluate the sustainability performance of companies, as part of the European green deal. EU law requires all large companies and all listed companies (except listed micro-enterprises) to disclose information on what they see as the risks and opportunities arising from social and environmental issues, and on the impact of their activities on people and the environment.
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