EU law mandates that all large and publicly traded companies (with the exception of micro-enterprises) disclose information on the hazards and opportunities they perceive to arise from social and environmental issues, as well as the impact of their activities on people and the environment.
This enables investors, civil society organisations, consumers and other stakeholders to evaluate the sustainability performance of companies, as part of the European green deal
New rules on corporate sustainability reporting: The Corporate Sustainability Reporting Directive
The Corporate Sustainability Reporting Directive (CSRD) went into effect on January 5, 2023. This new directive modernises and reinforces the reporting requirements for social and environmental data. Now, a broader range of significant corporations, in addition to publicly traded SMEs, will be required to report on sustainability.
The new laws will guarantee that stakeholders, including investors, have access to the data they require to evaluate how businesses affect people and the environment. Investors will also be able to evaluate the financial risks and opportunities associated with climate change and other sustainability-related concerns. Finally, by harmonising the required information, businesses will experience a reduction in reporting expenses over the long term.
The first companies will have to apply the new rules for the first time in the 2024 financial year, for reports published in 2025.
European Sustainability Reporting Standards (ESRS) will be required for companies subject to the CSRD. The European Financial Reporting Advisory Group (EFRAG), a non-profit organisation that brings together many stakeholders, produced the guidelines. The standards will be based on and contribute to global standardisation efforts while being customised to EU legislation.
Rules introduced by the Non-Financial Reporting Directive
The rules introduced by the Non-Financial Reporting Directive (NFRD) remain in force until companies have to apply the new rules of the CSRD. Under the NFRD, large companies have to publish information related to
- Environmental matters
- Social matters and treatment of employees
- Respect for human rights
- Anti-corruption and bribery
- Diversity on company boards (in terms of age, gender, educational and professional background)
These reporting rules apply to large public-interest companies with more than 500 employees. This covers approximately 11 700 large companies and groups across the EU, including
- listed companies
- insurance companies
- other companies designated by national authorities as public-interest entities
How can Global PCCS support ?
Global PCCS helps organisations to verify its opportunities arising from social and environmental issues, and on the impact of their activities on people and the environment.
Which furthur helps investors, civil society organisations, consumers and other stakeholders to evaluate the sustainability performance of companiesFor more information on the
service please book a free consultation by filling the form or writing to us at firstname.lastname@example.org