On November 28, 2022, the Council of the European Union approved the corporate sustainability reporting directive („CSRD“). There have been no significant updates from the version which was provisionally agreed upon by the Council and European Parliament in June 2022.
This EU version of ESG disclosure was presented as part of the European Green Deal and the Sustainable Finance Agenda and is applied not only to certain public companies but also to “large” non-public companies or certain non-EU companies. Below is a brief timeline of applicable entities.
Disclosure standards of CSRD are developed as European Sustainability Reporting Standards („ESRS“) by EFRAG, an advisory group of the European commission. On November 23, 2022, the first set of standards are submitted to European commissions. This set of standards was revised based on public comments received from April to August 2022. The first set will be supplemented by more standards, such as industry-specific standards.
This directive will be signed by the President of the European Parliament and the Council, and enter into force 20 days afterward. The new rules will need to be implemented by member states within 18 months.