CSRD
Corporate Sustainability Reporting Directive (CSRD) amends the existing reporting requirements of the NFRD.
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Disclosure of non-financial and diversity information by certain large undertakings and groups
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Ensure that investors have access to adequate non-financial information from companies to be able to take account of sustainability-related risks, opportunities and impacts in their investment decisions.
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Ensuring transparency on ESG factors up the investment chain from portfolio company to investment manager to asset owner
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This proposal aims to improve the flow of sustainability information in the corporate world. It will make sustainability reporting by companies more consistent, so that financial firms, investors and
the broader public can use comparable and reliable sustainability information.
The CSRD in some words
Disclosures on 6 sustainable topics:
environment
social and employee issues
human rights
bribery and corruption
diversity on company boards
social, human, and intellectual capital (intangibles)
CSRD: Proposal for a new Corporate Sustainability Reporting Directive
Disclosure on the following elements:
business model
policies (including due diligence processes)
outcomes
risks and risk management
key performance indicators (KPIs)
Objective:
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Revise and strengthen the NFRD
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Ensure reliable and comparable sustainability reporting => COMPANIES should be ACOUNTABLE FOR PEOPLE & PLANET
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Improve costs on the long term
Scope:
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Extend the scope of the current NFRD from 11,000 to 50,000 companies
Includes all large companies and all companies listed on regulated markets (excl. listed micro-enterprises)
Voluntary and simpler standards for SME
SME listed on a regulated market could use simpler standards (3 years laterz0
Standardization:
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New set of standards done with stakeholders to reach a broad consensus
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Consistent with the ambition of the European Green Deal and with Europe's existing legal frameworks
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Reporting in line with EU Taxonomy and the Principal Adverse impacts of the Sustainable Finance Disclosure Regulation (SFDR)
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Double materiality principle
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Aligned to the global standards (GRI, IIRC, SASB, CDSB, CDP, TCFD, …)
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Provide reports in digital format and digitally ‘tag’ reported information
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Forward Looking information, including targets and progress
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Audit
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Audit for reported information
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Limited level of insurance
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Where:
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Companies should report in the management report
Timing:
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EFRAG to publish first draft standards by mid-2022
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If agreement reached in the first half of 2022
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First set of reporting standards by the end of 2022​
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First application on report published in 2024, referring to the 2023 financial year
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