The emerging trend at National, European and Global level of the interconnection of the various reporting standards is an important step in order not to create additional burden on the transparency and decoupling of companies and organizations in relation to the issues of sustainable development and responsible entrepreneurship.
After the first European Non-Financial Reporting Directive (Non-Financial Reporting Directive), where according to it the large listed companies had to proceed with the Non-Financial Reporting Report, now, in 2021, The European Commission and in particular DG FISMA (Directorate-General for Financial Stability, Financial Services and Capital Market Union) has published the Corporate Sustainability Reporting Directive (CSRD) (https://ec.europa.eu/info/business-economy-euro/company-reporting-and-auditing/company-reporting/corporate-sustainability-reporting_en), which shows significant discrepancies compared to the sustainability reports that companies should submit to date.
1. The scope of implementation of the CSRD Directive, which concerns a larger number of companies, from 11,000 companies in Europe today, to 50,000 companies, is important. This is a draft directive that will complement the European Sustainable Financing Strategy. In this way, companies with more than 250 employees or listed companies will now have to translate their environmental, society and governance (ESG) policies into standard, reasoned and certified information documents.
This development translates into greater transparency for citizens, consumers and investors, so that businesses can play their full role in society and reduce the climate crisis. This is expected to lead to a confrontation with “greenwashing”, ie the spread of misleading information about how a company’s products are more environmentally friendly, healthy or sustainable.
2. In addition, sustainability information should be disclosed in the sustainability report management report, while internal auditing becomes mandatory.
3. Also, for the first time there will be a mandatory European reference standard. The European Financial Reporting Authority-EFRAG is currently in charge of developing and producing this European benchmark, which will apply to all stakeholders, businesses and investors.
The German Council for Sustainable Development has developed the sustainability code, which is an officially recognized European standard for the publication of non-financial information, and has adopted the European Taxation Regulation. Companies across Europe can now use and compile reports that comply with the EU Taxation Regulation, which came into force on 01/01/2022. This is an important step and the same will happen with the new CSRD.
This code, the German Sustainability Code, is a standard reference standard that enables all interested companies in Europe to approach the ESGs in a structured way and become more competitive in a sustainable way.
