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

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🗞️ 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

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