ESMA Urges Companies to Prepare for New CSRD Sustainability Reporting Requirements

Overview:

The European Securities and Markets Authority (ESMA) has issued a Public Statement urging companies to prepare for the new Corporate Sustainability Reporting Directive (CSRD) requirements. The CSRD expands sustainability reporting obligations for over 50,000 companies, emphasizing governance arrangements, materiality assessments, and data collection systems. ESMA highlights the importance of readiness to meet detailed reporting standards and conduct double materiality assessments.

Summary:

The European Securities and Markets Authority (ESMA) has issued a Public Statement on the first application of the European Sustainability Reporting Standards (ESRS). This is aimed at helping companies prepare for new sustainability reporting and supervisory requirements under the EU’s Corporate Sustainability Reporting Directive (CSRD), with the first reports set to begin next year.

The CSRD is a significant update to the EU’s Non-Financial Reporting Directive (NFRD), expanding the number of companies required to provide sustainability disclosures from around 12,000 to over 50,000. It introduces more detailed reporting requirements on company impacts on the environment, human rights, social standards, and sustainability-related risk.

Key areas of relevance for companies preparing to issue their first CSRD reports include the establishment of governance arrangements and internal controls, designing and conducting materiality assessments, being transparent about transitional reliefs provided by the regulation in the first years of application, preparing a digitization-ready sustainability statement, and creating connectivity between financial and sustainability information.

ESMA emphasizes the importance of preparing data collection and management systems to meet the requirements of the CSRD. Even companies that have experience with sustainability reporting under prior regulatory systems should assess if their existing systems are still fit-for-purpose under the CSRD.

In summary, the ESMA is calling on companies to carefully set up their systems of data collection and analysis, as well as internal controls, in order to meet the ESRS’ detailed reporting requirements and to conduct double materiality assessments.

Source: https://www.esgtoday.com/esma-calls-on-companies-to-get-data-systems-in-place-to-meet-new-csrd-sustainability-reporting-requirements/