All large companies operating in the EU will be required to disclose data on the impact of their activities, as well as any sustainability risks they are exposed to from 2024 after the European Parliament adopts new reporting rules.
The Corporate Sustainability Reporting Directive (CSRD), adopted today with 525 votes in favour, 60 votes against and 28 abstentions, will make businesses more publicly accountable by obliging them to regularly disclose information on their societal and environmental impact. This would end greenwashing, strengthen the EU’s social market economy and lay the groundwork for sustainability reporting standards at a global level.
“All large companies in the EU will need to disclose data on the impact of their activities on people and the planet and any sustainability risks they are exposed to,” the press release stated, adding that the European Council “is expected to adopt the proposal on 28 November, after which it will be signed and published in the EU Official Journal.”
The new rules are expected to address shortcomings in existing legislation on the Non-Financial Reporting Directive (NFRD). This legislation, which came into effect in all EU member states in 2018 is perceived as largely insufficient and unreliable, as it only applies to a limited number of companies and contains looser rules that do not require companies to report on sustainability risk or environmental and societal impact.
The parliament believes that the new CSRD directive “will make businesses more publicly accountable” and “would end greenwashing, strengthen the EU’s social market economy and lay the groundwork for sustainability reporting standards at global level.”
The directive will affect some 50,000 companies operating in the EU, as well as non-EU companies with a turnover of over 150 million Euros ($152.8 million).
The directive will go into effect 20 days after its publication in the EU Official Journal, and the rules will start applying between 2024 and 2028.
