EU Commission Publishes FAQs on New Corporate Sustainability Reporting Rules

Aug 15

Overview:

The European Commission (EC) has released a set of frequently asked questions (FAQs) to aid in the implementation of the Corporate Sustainability Reporting Directive (CSRD). These FAQs aim to clarify various aspects of the CSRD and the first set of the European Sustainability Reporting Standards (ESRSs), ensuring stakeholders can comply with regulatory requirements effectively.

Summary:

The FAQs cover a range of topics including sustainability reporting requirements, assurance of sustainability reporting, key intangible resources, and requirements for third-country entities. The EC’s responses are designed to facilitate compliance without introducing new obligations or extending existing ones.

Key Features of the FAQs

Assurance of Sustainability Reporting: Companies are required to obtain external assurance on their sustainability reports to ensure the accuracy and reliability of the disclosed information. This step is crucial for building trust among stakeholders.
Key Intangible Resources: These resources, such as intellectual property and human capital, are increasingly recognized as vital to a company’s long-term success. The CSRD mandates that companies provide detailed information on these intangibles.
Requirements for Third-Country Entities: These entities must comply with the same sustainability reporting standards as EU-based companies. The FAQs provide guidance on how these requirements apply to third-country entities, ensuring a level playing field.
Sustainable Finance Disclosure Regulation (SFDR): The FAQs touch upon the Sustainable Finance Disclosure Regulation (SFDR) and its interplay with the CSRD. The SFDR requires financial market participants to disclose how they integrate sustainability risks into their investment decisions. The alignment of CSRD and SFDR aims to create a cohesive framework for sustainability reporting and disclosures.

By addressing these key areas, the EC’s FAQs provide valuable guidance for companies navigating the complexities of the CSRD and ESRSs, promoting a more sustainable and transparent business environment in the EU.

Source: https://www.iasplus.com/en/news/2024/08/csrd-faqs