The Corporate Sustainability Reporting Directive (“CSRD”) remains a key developing narrative for multinationals. As reported previously, CSRD introduces a requirement for in-scope companies to publicly report annually on ESG matters. The new sustainability requirement covers an extensive range of sustainability-related disclosures (up to approximately 1,400 data points), which must be made in accordance with detailed European Sustainability Reporting Standards (“ESRS”) developed by EFRAG. Disclosures under the CSRD will need to be audited; initially audits will be to a limited assurance standard but over time this will progress to full reasonable assurance. Our ESG Advisory Group has recently published a guide entitled: CSRD: EU Sustainability Reporting for US Multinationals, explaining how US-headquartered multinationals can be subject to the new regime which goes significantly beyond the existing voluntary reporting frameworks that many US-multinational businesses will be familiar with (eg, GRI, SASB, CDP, TCFD).
Since our last update, EFRAG and CDP (a global environmental disclosure system used by 23,000 companies) announced a collaboration to accelerate the market uptake of ESRS. Under the arrangement, CDP will explore and implement the alignment of its disclosure system with the ESRS and EFRAG will provide technical expertise, access and guidance.
EFRAG has also recently released a document detailing the data points contained within the 12 sector-agnostic ESRS and providing related implementation guidance.