Stockholm (NordSIP) – On 10 November, the EU Parliament adopted the Corporate Sustainability Reporting Directive (CSRD) with 525 votes in favour, 60 votes against and 28 abstentions. The purpose of the long-awaited directive is to make businesses more publicly accountable by obliging them to regularly disclose information on their societal and environmental impact.
The CSRD is one of the cornerstones of the European Green Deal and the Sustainable Finance Agenda and part of a comprehensive EU policy to commit companies to respect human rights and reduce their impact on the planet. The Commission first presented its proposal on the directive in April 2021, following a call from the Parliament for a revision of the 2014 Non-Financial Reporting Directive (NFRD). For nearly 50 000 companies in the EU, collecting and sharing sustainability information will now become the norm, compared to about 11 700 companies covered by the current rules.
The ultimate goal of the regulation is to put financial and sustainability reporting on an equal footing. To ensure that companies provide investors with comparable and reliable data, they will be subject to independent auditing and certification. “Europe is showing the world that it is indeed possible to ensure finance, in the narrow sense of the word, does not govern the entire global economy,” comments Pascal Durand, the Commission’s rapporteur.
The next step is for the Council to adopt the proposal, which is scheduled for 28 November. After that, the CSRD will be signed and published in the EU Official Journal and enter into force 20 days later. The reporting obligations of the new directive will progressively come into force between 2024 and 2028. The new rules will apply almost directly to large public companies with over 500 employees already subject to the NFRD, starting 1 January 2024, with reports due in 2025. Other large European companies that do not report under the NFRD currently have another year to prepare for the changes, with reports due in 2026. From 1 January 2026, the SFRD applies even to listed SMEs and other undertakings, with reports due in 2027. SMEs may, however, opt out until 2028.
