On February 24, 2022, the European Council adopted its position on a corporate sustainability reporting directive (CSRD), a proposal drafted by the European Commission, that will correspond with the European sustainable finance strategy. The Commission’s proposal is revision of the non-financial reporting directive from 2014, and “will increase a company’s accountability, prevent divergent national standards and ease the transition to a sustainable economy.”
According to the Minister for Economic Affairs, Finance and Recovery, Bruno Le Maire, after prompting from the French Presidency, the adoption is a step towards a European regulatory framework for sustainable finance. He stated that, “…companies with more than 250 employees or listed companies will now have to translate their environmental, social and governance policy into standardised, justified and certified information documents. This means greater transparency for citizens, consumers and investors so that businesses can play their full part in society. This is the end of greenwashing. Today, Europe is setting the rigorous non-financial reference standards of tomorrow, in line with our environmental and social ambitions.”
The proposal includes:
- an extension of the scope to all large companies and companies listed on a regulated market (except listed micro-companies)
- a certification requirement for sustainability reporting
- more detailed and standardised requirements on the information to be published by companies
- improved accessibility of information, by requiring its publication in a dedicated section of company management reports
More information on the Council’s adoption of the CSRD is available here.