The Corporate Sustainability Reporting Directive (CSRD) is a proposed regulation by the European Union (EU) that aims to update and strengthen the existing non-financial reporting requirements for large companies and groups operating within the EU. The proposal was published by the European Commission in April 2021 as part of the European Green Deal, and is currently being discussed by the European Parliament and Council.
If adopted, the CSRD would replace the existing Non-Financial Reporting Directive (NFRD), which was introduced in 2014 and requires large companies to disclose certain non-financial information, such as environmental and social performance, in their annual reports. The CSRD would expand the scope of the reporting requirements to include all large companies and groups operating within the EU, regardless of whether they are listed or not, and would require them to report on a broader range of sustainability topics, such as biodiversity, human rights, and gender equality.
The CSRD would also introduce mandatory sustainability reporting standards that are aligned with international standards, such as the Global Reporting Initiative (GRI) and the Task Force on Climate-related Financial Disclosures (TCFD), to ensure that companies report relevant and comparable information. Additionally, the CSRD would introduce a digital platform for reporting, which would make the information more accessible and comparable for stakeholders.
The goal of the CSRD is to improve the transparency and comparability of sustainability reporting, and to facilitate the transition towards a more sustainable and circular economy. The proposed directive is part of a broader set of EU initiatives aimed at achieving the EU’s sustainability goals, including the Paris Agreement on climate change and the United Nations Sustainable Development Goals (SDGs).
Source:
- European Commission website: “Corporate Sustainability Reporting Directive”: https://ec.europa.eu/info/law/better-regulation/have-your-say/initiatives/12683-Corporate-Sustainability-Reporting-Directive-CSRD-
- European Parliament website: “Corporate Sustainability Reporting Directive (CSRD)”: https://www.europarl.europa.eu/legislative-train/theme-a-european-green-deal/file-corporate-sustainability-reporting-directive-csrd
- Global Reporting Initiative (GRI) website: “Europe proposes new directive on corporate sustainability reporting”: https://www.globalreporting.org/news/europe-proposes-new-directive-on-corporate-sustainability-reporting/
- Task Force on Climate-related Financial Disclosures (TCFD) website: “The European Union’s Corporate Sustainability Reporting Directive (CSRD) proposal and the TCFD recommendations”: https://www.fsb-tcfd.org/2021/05/27/the-european-unions-corporate-sustainability-reporting-directive-csrd-proposal-and-the-tcfd-recommendations/
- EY website: “European Union proposes update to non-financial reporting directive”: https://www.ey.com/en_gl/news/2021/04/european-union-proposes-update-to-non-financial-reporting-directive
