The European Parliament (EP) and the Council, published in 2014 the Non-Financial Reporting Directive (NFRD) which introduced a requirement for companies to report both on how sustainability issues affect their performance, position and development, and on their impact on people and the environment.
In addition, the EP and the Council, published the Taxonomy Regulation and the Regulation on sustainability‐related disclosures in the financial services sector (SFRD).
The NFRD, together with the SFDR and the Taxonomy Regulation, are the central components of the sustainability reporting requirements underpinning the EU’s sustainable finance strategy. In this context, the European Commission (EC) has published the Proposal for a Corporate Sustainability Reporting Directive.
EC – Proposal for a Corporate Sustainability Reporting Directive
Executive summary
The EC has published a proposal for a Corporate Sustainability Reporting Directive which will allow financial firms, investors and the broader public to use comparable and reliable sustainability information. This Directive would ensure that the reporting requirements for companies are consistent with the Taxonomy Regulation on sustainable investments.
Main content
This Technical Note summarises the main aspects of this Directive proposal, which includes amendments to the following directives and the following regulation:
- Amendments to Directive 2013/34/EU (the Accounting Directive). Modifies the personal scope of the reporting requirements, extending their application to all large companies and all companies with securities listed on EU regulated markets, except micro-companies. Specifies in greater detail the information that companies should disclose: introduces new requirements for companies to provide information about their strategy and business model, including, among others, the compatibility with the transition to a sustainable economy.
- Amendments to Directive 2004/109/EC (the Transparency Directive). It introduces the requirement to include sustainability reporting in the management report. Furthermore, empower the EC to adopt measures to establish a mechanism for the determination of the equivalence of sustainability reporting standards used by non-EU issuers.
- Amendments to Directive 2006/43/EC (the Audit Directive). Includes the assurance of annual and consolidated sustainability reporting, where carried out by the statutory auditor or audit firm carrying out the statutory audit of financial statements.
- Amendments to Directive 537/2014/EC (the Audit Regulation). It requires statutory auditors and audit firms to annually inform the competent authority in question of which revenues, among the revenues from non-audit services, were generated from the assurance of sustainability reporting.
Download the technical note by clicking here.