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EU moves forward with drafting sustainability reporting standards for non-EU companies

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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 Forbes or enjoy below:

🗞️ Driving the news: The EU is advancing efforts to establish sustainability reporting standards for non-EU companies, as part of the Corporate Sustainability Reporting Directive (CSRD)
Set to take effect in 2028, these new requirements will compel large non-EU companies operating in the EU to disclose greenhouse gas (GHG) emissions and climate-related policies, with some scope limitations compared to EU-based firms.

🔭 The context: Introduced in 2021, the CSRD aims to expand beyond traditional financial reporting by mandating ESG disclosures, replacing the older Non-Financial Reporting Directive
The European Financial Reporting Advisory Group (EFRAG) is developing these standards, initially prioritizing EU-based companies but now refocusing on non-EU guidelines, following EU Parliament’s recent directions

🌍 Why it matters for the planet: Broader and stricter global reporting on climate impacts could drive more sustainable practices, while pushing companies worldwide to align with EU climate goals
These standards set a significant precedent, potentially influencing global ESG regulation and improving accountability for carbon emissions

⏭️ What's next: A draft of these non-EU standards will be published in early 2025 for public input, with final adoption anticipated in 2026
The EU Council may push for further simplification, especially with growing voices for streamlined reporting requirements

💬 One quote: “EFRAG’s SRB is looking to further limit the scope,” shared SRB member Laurence Rivat, who voiced concerns over giving non-EU firms a competitive advantage

📈 One stat: Reporting will apply to non-EU companies with over €150 million in EU-generated turnover

Click for more news covering the latest on ESG

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