Global preparations ensue for EU’s CSRD
The last few years have seen a paradigm shift in Environmental, Social, and Governance (ESG), with several new pivotal reporting frameworks. The Corporate Sustainability Reporting Directive (CSRD) is perhaps the most pressing new regulation in this space, requiring immediate attention from global corporations.
Recently, PwC published a handy document – Worldwide impact of CSRD – are you ready? – designed to guide corporates from elsewhere in the world through preparations for the impact the regulation could have beyond the EU.
The CSRD, published in December 2022, establishes extensive sustainability reporting requirements with a worldwide impact. The concurrent adoption European Sustainability Reporting Standards (ESRS) by the European Commission in July 2023 amplifies the directive’s reach – and ensures that reporting will be digital.
The directive includes non-EU entities under specific circumstances – such as companies with securities listed on EU-regulated markets, ‘large’ EU unlisted companies, and unlisted EU companies’ part of a ‘large group’.
The effective date and reporting requirements vary, but the onset of obligations, commencing as early as the fiscal year 2024 for some, is imminent. Companies unprepared for the far-reaching implications of the CSRD risk grappling with compliance challenges.
As companies begin preparation, the landscape still holds uncertainties, including the potential for equivalence with other sustainability frameworks such as ISSB to lower burden.
Beyond compliance, the CSRD also contains an opportunity for companies to proactively communicate their sustainability narratives to investors. Companies are urged to embark on early preparations to lay the foundation for a seamless and successful implementation.
For detailed insights and guidance on navigating the terrain of CSRD’s worldwide impact, refer to PwC’s publication “Worldwide Impact of CSRD – Are You Ready?” here.
