What implications does the CSRD have for non-financial disclosures?

The EU Corporate Sustainability Reporting Directive (CSRD) which entered into force in January 2023 represents a significant expansion of mandatory sustainability reporting. The current Non-Financial Reporting Directive (NFRD) applies to approximately 12,000 companies. From 2024 onwards, the new directive will impact 50,000 companies, extend the scope of the EU taxonomy and require disclosure against numerous environmental, social, and governance (ESG) indicators. EcoAct’s Stefan Holzheuser and Jordan Hairabedian guide us through this important directive and next steps for both EU and non-EU businesses.

Objectives of the CSRD

As a crucial pillar of the EU Sustainable Finance Strategy, the CSRD aims to guide investment flows towards sustainable enterprises to ensure that the following goals of the European Green Deal can be achieved:

• Reduction of net greenhouse gas emissions by at least 55% by 2030 compared to 1990 levels
• Climate neutrality by 2050 (net-zero greenhouse gas emissions)

The level of sustainable investment required to achieve this can only be realised if asset managers and banks are provided with more information on the sustainability performance of the companies in which they potentially invest. This is where the CSRD comes in, creating a comprehensive, transparent, and uniform reporting basis at EU level for corporates. This binding framework has been informed by international references, such as the TCFD, CDP and the EU taxonomy, three topics where EcoAct has in-depth expertise.

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