As part of the European Green Deal, the Corporate Sustainability Reporting Directive (CSRD - 2022/2464) requires companies in scope to report the information necessary to understand the company’s impact on sustainability issues and the information necessary to understand how sustainability issues affect the company’s development, performance and position.
On 31 July 2023, the European Commission adopted the first set of European Sustainability Reporting Standards (ESRS) as a delegated regulation (as foreseen in Section 29b (1) of the CSRD), which provides common standards for the reporting requirements under the CSRD. This first set of the ESRS mainly contains general, sector-agnostic reporting standards. The second set of the ESRS (sector-specific standards) is expected to be adopted by the Commission by 20 June 2024.
The first set of ESRS adopted by the European Commission includes:
A first draft of these ESRS was initially developed and published by EFRAG (European Financial Reporting Advisory Group) in late 2022 and subsequently amended by the Commission. The Commission's amendments include, in particular: (i) some additional reporting requirements have been included; (ii) companies have been given more discretion to decide what information is relevant in their specific situation; and (iii) some additional reporting requirements have been made voluntary instead of mandatory.
By the end of August 2023, such Delegated Regulation will be transmitted to the European Parliament and to the Council, which will scrutinize it for two (or possibly four) months. The European Parliament or the Council may object to the Delegated Regulation, but may not amend it.
The reporting requirements under the ESRS will be phased in according to the following schedule: