Reporting

The European Union (“EU”) has passed the world’s most far-reaching mandatory environmental, social, and governance (“ESG”) reporting regime.

The Corporate Sustainability Reporting Directive (“CSRD”) will apply to an initial group of large EU companies from 2024 and gradually extend its reach to smaller companies over the course of the following four years. It is ultimately expected to apply to more than 50,000 companies incorporated, listed, or doing business in the EU. Notably, from 2028 the CSRD will apply to non-EU parent companies that generate more than EUR 150M of net turnover in the EU and have at least one EU subsidiary subject to the CSRD (or a local branch of a certain size). (See Appendix for a table with detailed information on the CSRD’s application thresholds and dates.)Continue Reading EU Mandatory ESG Reporting Takes Shape: CSRD is Passed and EFRAG Adopts Draft ESRS

ESG and sustainability disclosure and reporting requirements for listed and non-listed companies are rapidly taking shape. As announced at COP26, there is now an International Sustainability Standards Board (“ISSB”) tasked with encouraging global uptake of ESG reporting standards. In the EU, the European Financial Reporting Advisory Group (“EFRAG”) is the body tasked with developing mandatory sustainability and ESG reporting standards under the EU’s Corporate Sustainability Reporting Directive (“CSRD”). Both the ISSB and EFRAG have each recently published ESG and sustainability disclosure and reporting “prototypes”. These prototypes are important pieces to an emergent reporting regime that is very likely to become critical commercially—if not mandatory—for many companies. There are also encouraging signs that what has until recently been a relatively disjointed set of standards, is beginning to come together under a more harmonized agenda and institutions.

This blog presents an overview of some of the detailed climate-related disclosure and reporting metrics covered by the ISSB and EFRAG climate prototypes, and highlights critical considerations for companies as more detailed and mandatory ESG and sustainability reporting frameworks begin to take shape.Continue Reading ESG & Sustainability Reporting Developments: Climate Disclosure Prototypes