A PDF version of the full publication is attached here: Worldwide impact of CSRD - are you ready? (PDF 759kb)
This In the loop was updated in January 2024 to reflect an adjustment to the scoping thresholds and issuance of draft implementation guidance. It was also updated in October and November 2023 to provide recent updates, including the end of the scrutiny period of the European Sustainability Reporting Standards, recent developments at the European Commission, and additional information on available exemptions.
The transformation of ESG reporting accelerated in 2022 with the release of major proposals in the European Union (EU) and the United States (US), as well as globally by the International Sustainability Standards Board (ISSB). Although they all have the potential to impact multinational companies, the EU’s Corporate Sustainability Reporting Directive (CSRD) perhaps requires the most immediate attention. Even as companies wait for the SEC proposal to be finalized and to see whether jurisdictions in which they operate will adopt the final IFRS ® Sustainability Disclosure Standards, the final reporting directive was published in December 2022 setting forth sustainability reporting requirements that are expected to affect companies worldwide. The related sector-agnostic reporting standards, the European Sustainability Reporting Standards (ESRS), were adopted by the European Commission (EC) in July 2023.
The scope of companies directly impacted by the new requirements is expansive, including US and other non-EU headquartered companies. Determining whether the scope of the CSRD captures a company or one or more subsidiaries, however, has some complexity and merits priority focus by companies operating in the EU. And even once the scope determination is complete, the standards required and the effective date differ depending on the particular circumstances. What is clear, though, is that reporting will begin as early as fiscal year 2024 for some companies, and the reporting requirements are extensive.
Companies that fail to appreciate the impact of the new requirements will find themselves scrambling to comply. Further, although this may appear to be “just” a compliance exercise, it is also an opportunity for forward-thinking companies to share their sustainability stories with investors and other stakeholders.
To read the full In the loop publication, download our PDF: Worldwide impact of CSRD - are you ready?
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