The European Council has given the green light to the Corporate Sustainability Reporting Directive (CSRD) which will require more companies to publish detailed information about their impact on the environment.
CSRD builds upon pre-existing rules on non-financial reporting introduced in the 2014 non-financial reporting directive (NFRD) with more European and non-European companies now subject in the future to sustainability reporting requirements.
The new legislation will apply to all large companies in the EU, both public and private, and apply to around 50,000 organisations, up from the 11,700 that were subject to NFRD.
“The new rules will make more businesses accountable for their impact on society and will guide them towards an economy that benefits people and the environment,” said Jozef Síkela, minister for Industry and Trade. “Data about the environmental and societal footprint would be publicly available to anyone interested in this footprint. At the same time, the new extended requirements are tailored to various company sizes and provides them with a sufficient transition period to get ready for the new requirements.”
Companies will have to provide details on social and governance issues, disclose information about their sustainability due diligence process, detail the actual and potential negative effects of their operations, and report on Scope 3 emissions including Scope 3.6 emissions from business travel.
The Global Business Travel Association welcomed the approval of the Corporate Sustainability Reporting Directive. “The expanded level of reporting will enable investors and procurement professionals to benchmark new suppliers not only on financial metrics but also on a supplier’s purpose, ESG policy and sustainability credentials,” said Catherine Logan, Regional VP – EMEA, GBTA.
Delphine Millot, SVP sustainability and MD GBTA Foundation, GBTA, added: “The outcome of the CountEmissionsEU proposal supported by GBTA will be crucial in providing a harmonised methodology to calculate transport-related emissions in the EU, for reporting on scope 3 emissions as required by the CSDR, paving the way for effective decarbonisation of the business travel sector.”
The new CSRD will be phased into use in 2024. From 1 January 2024, it will apply to large public interest entities (with more than 500 employees) already subject to the Non-Financial Reporting Directive, with reports due in 2025. From 1 January 2025, it will cover large companies not currently subject to the Non-Financial Reporting Directive (with more than 250 employees and/or sales of €40 million and/or total assets of €20 million), with reports due in 2026. And from 1 January 2026, it will apply to listed small and medium-sized enterprises (SMEs) and other companies whose reports are due in 2027. SMEs may be exempt from the requirement until 2028.
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