Companies must disclose information relating to their operations and management of social and environmental issues
Companies must report in line with mandatory EU sustainability reporting standards. Draft standards on EU sustainability reporting will be developed by the European Financial
Reporting Advisory Group (EFRAG)- the first set of standards is expected to be adopted by October 2022
Companies will need to digitally tag reported information into a European single access point
Due Diligence
Normative scope
Human Rights
Including the treatment of employees
Environment
The exact scope will be revised by the Parliament in the upcoming evaluation
Other Social Matters
Anti-corruption and bribery
Diversity of the board (including age, gender, educational and professional background)
Broad ranging
Value chain scope
Own Operations
Subsidiaries
Covers the EU subsidiaries of non-EU companies
Direct Suppliers
Indirect Suppliers
Due diligence assessments also extend to business partners defined as any party that supplies goods or services directly to the enterprise, but that is not part of the supply chain
Full Value Chain
Company scope
Large Companies
All large companies are covered (eliminates the 500-employee threshold in the NFRD)
SMEs
Extends the scope to SMES with securities listed on regulated markets
Covered SMEs are allowed to report according to standards that are simpler than the standards that will apply for large companies
Around 49,000 companies (including large companies) in the EU would be required to comply with the CSRD
All sectors
Administrative enforcement
Monitoring
EU-wide audit (assurance) requirement for reported sustainability information to ensure that reported information is accurate and reliable
‘limited’ rather than a ‘reasonable’ assurance requirement
Administrative Sanctions
Judicial enforcement
Civil Liability
Facilitating Access to Justice
Law
Directive of the European Parliament and of the Council amending Directive 2013/34/EU, Directive 2004/109/EC, Directive 2006/43/EC and Regulation (EU) No 537/2014, as regards corporate sustainability reporting
European Union
December 14, 2022
AreaEuropean Law
Reporting
Due diligence
Due diligence and remedy
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