Who will be covered by the EU Directive on Reporting on Sustainability?
All large companies in the EU will have to disclose data on the impact of their activities on people and the planet and any sustainability risks to which they are exposed.
Adopted today (10.11.2022) by 525 votes in favour, 60 against and 28 abstentions, the Corporate Sustainability Reporting Directive will oblige companies to regularly disclose their impact on society and the environment. This aims to put an end to greenwashing, strengthen the EU’s social market economy and lay the foundations for sustainability reporting standards at global level.
The starting point for the work on the CSRD was the belief that the current rules on non-financial disclosure (NFRD) are largely insufficient. The CSRD introduces more detailed reporting requirements on the environmental, human rights and social impacts of companies. They are based on common criteria in line with the EU’s climate objectives. The Commission will adopt a first set of standards by June 2023.
To ensure that reliable information is provided, the Directive obliges companies to undergo independent audits and certification. This will increase the rank of ESG reporting, and investors will have comparable and reliable data.
The new EU sustainability reporting requirements will apply to all large companies, regardless of whether they are listed on stock exchanges or not. Non-EU companies with significant activities in the EU (with a turnover of more than €150 million in the EU) will also have to comply with the requirements. Listed SMEs will also be covered, but will have more time to adapt to the new rules.
For almost 50,000 companies in the EU, collecting and sharing sustainability information will become the norm, compared with the approximately 11,700 companies covered by the current rules.
The Proposal is expected to be adopted by the Council on 28 November, after which it will be signed and published in the Official Journal of the EU. The Directive will enter into force 20 days after its publication. The rules will take effect from 2024 to 2028:
- From 1 January 2024 for large public-interest companies (with more than 500 employees) already covered by the Non-Financial Reporting Directive, with reports until 2025;
- From 1 January 2025 for large companies that are currently not subject to the Non-Financial Reporting Directive (with more than 250 employees and/or EUR 40 million turnover and/or EUR 20 million total assets), with reports until 2026;
- From 1 January 2026, for SMEs and other listed companies, with reports until 2027, SMEs can resign until 2028.
Projekt otrzymał dofinansowanie z Norwegii poprzez Fundusze Norweskie 2014-2021, w ramach programu „Dialog społeczny – godna praca”.
