More than 50,000 companies to report climate impact in EU from 2024 after pushback fails

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🗞️ Driving the news: Over 50,000 companies operating within the European Union will be mandated to evaluate the environmental implications of their operations according to the new sustainability reporting standards approved by the European Parliament
• This initiative will commence in January, targeting multinational corporations as well, despite opposition from a group of rightwing and liberal MEPs

🔭 The context: The move to enhance transparency and reporting on environmental matters is part of a broader resistance against the dilution of environmental, social, and governance (ESG) investing standards, especially in the US and Europe
• The EU's approach emphasizes both the impact of climate change on businesses and the influence of these businesses on the environment, a principle termed "double materiality"

🌍 Why it matters for the planet: The sustainability reporting standards aim to promote transparency in companies regarding their environmental footprint and specify the criteria for reporting, including pollution levels, water consumption, and effects on local communities
• The EU's stance on demanding such comprehensive reporting distinguishes it from other markets, notably the US

⏭️ What's next: Initially, over 11,000 publicly listed companies will be required to adhere to these standards and then this number will expand to include large unlisted companies and listed SMEs by 2025 and 2026, encompassing approximately 50,000 entities
• The standards were designed to align with other international reporting standards, ensuring consistency for companies operating in multiple regions

💬 One quote: "Wednesday’s vote signals the transition from political debate to practical implementation for these new rules — which are a game-changer for corporate accountability, in the EU and globally" (Eelco van der Enden, Global Reporting Initiative)

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