Minister Troy welcomes agreement on the Corporate Sustainability Reporting Directive
Minister for Trade Promotion, Digital and Company Regulation, Robert Troy TD welcomed agreement by the European Parliament last night on the Corporate Sustainability Reporting Directive which introduces new rules on corporate sustainability reporting for companies.
Welcoming the agreement, Minister Troy said:
"This agreement is excellent news for consumers, investors and other stakeholders with an interest in how the businesses they engage with are addressing sustainability matters. The Directive will ensure that the largest businesses across operating in Europe and listed SMEs provide reliable and comparable information annually in relation to their impacts on environment, social and governance matters as well as human rights. I believe it strikes the correct balance between requiring reporting which gives maximum relevant information while also avoiding unnecessary burdens on companies.”
“The need for real action on climate change continues to deepen and more and more we see the impact of climate change on business and investment in our country. Ultimately, we cannot be leaders in the charge against climate change without business and I am committed to working with companies to realise our ambitions.”
Minister Troy acknowledged the significant work of the European Commission and Parliament and thanked the French Presidency for its focus and ambition in reaching agreement on this important proposal.
“We set ourselves an ambitious agenda under the European Green Deal and Sustainable Finance Agenda, the comprehensive agreement reached is a clear indication of our commitment to delivering on those commitments and I congratulate the French presidency on this milestone. I will now be working with officials from my Department to progress transposition of the Directive. An important part of this process will be engaging with stakeholders, businesses and civil society alike, and I intend to conduct a robust public consultation process in the autumn.”
The Corporate Sustainability Reporting Directive will make businesses more accountable by obliging them to disclose their impact on the environment and human rights. The Directive is a cornerstone of the European Green Agenda and aims to end greenwashing and lay the groundwork for sustainability reporting standards at global level.
Overview of the Directive
- The new sustainability reporting requirements will apply to all large companies (with over 250 employees and a 40 million euro turnover, as defined in the Accounting directive), whether listed or not. Companies will have to report on their impact on the environment, human rights, social standards and work ethics, based on common standards.
- The information companies provide on their impact on the climate or human rights will be independently audited and certified.
- Financial and sustainability reporting will be on an equal footing and investors will have access to reliable, transparent and comparable data.
- Non-EU companies with substantial activity in the EU market (150 million euro in annual turnover in the EU) will have to follow equivalent reporting rules.
Member States will have 18-months from adoption of the Directive to transpose it, with a view to mandatory requirements commencing for financial years on or after:
- 1 January 2024 for companies and public interest entities in scope of the existing rules (greater than 500 employees);
- 1 January 2025 for other larger companies and public interest entities (greater than 250 employees); and
- 1 January 2026 for listed SMEs, with a potential opt out until 2028.
A public consultation will be held later in the year to inform the transposition.
The final text of the Directive will be published once it has undergone the formal adoption process.