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Asian companies face reputation risk as tougher EU sustainability rules kick in

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By illuminem briefings

· 2 min read


illuminem summarizes for you the essential news of the day. Read the full piece on South China Morning Post or enjoy below:

🗞️ Driving the news: Asian companies, especially in China, face growing pressure to comply with the EU's Corporate Sustainability Reporting Directive (CSRD), which requires detailed environmental and social disclosures
This regulation applies to both EU-based firms and foreign companies doing significant business in the EU, with deadlines beginning as early as 2024
Experts see it as a potential advantage for companies that adapt quickly

🔭 The context: The CSRD is part of the EU's effort to cut greenhouse gas emissions by 55% by 2030 and reach carbon neutrality by 2050
The new rules will require firms to provide comprehensive reporting on sustainability metrics, far beyond previous standards, which many Asian firms are unprepared for
Non-EU firms like Chinese manufacturers could face compliance challenges, especially in key sectors like electric vehicles and solar panels

🌍 Why it matters for the planet: The directive aligns with global climate goals, compelling companies across industries to prioritize sustainability
By requiring extensive environmental reporting, the EU aims to foster transparency and encourage businesses worldwide to reduce their carbon footprints

⏭️ What's next: Larger non-EU companies must meet CSRD requirements by 2024, with smaller firms given until 2028
Asian businesses will need to rapidly upgrade their sustainability reporting or risk losing access to the critical EU market

💬 One quote: "Many companies in Asia are still unprepared to meet the obligations, putting their reputation at risk," said Will Symons, Deloitte Asia-Pacific’s sustainability leader

📈 One stat: The EU aims to reduce greenhouse gas emissions by 55% by 2030, as compared to 1990 levels

Click for more news covering the latest on corporate sustainability 

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