Our key takeaway: Companies will no longer be able to rely on their own materiality assessment to select what they can report on. Earlier this November, the European Parliament adopted the EU Commission’s proposal for the EU Corporate Sustainability Reporting Directive (CSRD), broadening and amending the EU Non-Financial Reporting Directive (NFRD). Once adopted by the EU Council, the CSRD will become law. The European Financial Reporting Advisory Group (EFRAG) has issued the first set of draft European Sustainability Reporting Standards. These detail what companies’ sustainability reporting obligations will be as they report according to the CSRD. In short, be prepared to report in line with the UNGPs and the concept of human rights due diligence provided for.
The European Financial Reporting Advisory Group (EFRAG) has approved the First set of draft European Sustainability Reporting Standards (ESRS) (November 2022):