What the EU is doing and why
EU law requires all large companies and all listed companies (except listed micro-enterprises) to disclose information on what they see as the risks and opportunities arising from social and environmental issues, and on the impact of their activities on people and the environment.
This helps investors, civil society organisations, consumers and other stakeholders to evaluate the sustainability performance of companies, as part of the European green deal.
New rules on corporate sustainability reporting: The Corporate Sustainability Reporting Directive
On 5 January 2023, the Corporate Sustainability Reporting Directive (CSRD) entered into force. This new directive modernises and strengthens the rules concerning the social and environmental information that companies have to report. A broader set of large companies, as well as listed SMEs, will now be required to report on sustainability.
The new rules will ensure that investors and other stakeholders have access to the information they need to assess the impact of companies on people and the environment and for investors to assess financial risks and opportunities arising from climate change and other sustainability issues. Finally, reporting costs will be reduced for companies over the medium to long term by harmonising the information to be provided.
The first companies will have to apply the new rules for the first time in the 2024 financial year, for reports published in 2025.
Companies subject to the CSRD will have to report according to European Sustainability Reporting Standards (ESRS). The standards were developed by the EFRAG, previously known as the European Financial Reporting Advisory Group, an independent body bringing together various different stakeholders. The standards will be tailored to EU policies, while building on and contributing to international standardisation initiatives.
On 6 June 2023 the Commission opened a four-week public feedback period on a first set of sustainability reporting standards for companies. These draft standards take account of technical advice from EFRAG in November 2022.
Following the feedback period, the Commission has considered the feedback received and adopted the ESRS as a delegated regulation. The Commission will submit the ESRS delegated act to the European Parliament and Council for scrutiny.
The CSRD also requires assurance on the sustainability information that companies report and will provide for the digital taxonomy of sustainability information.
Rules introduced by the Non-Financial Reporting Directive
The rules introduced by the Non-Financial Reporting Directive (NFRD) remain in force until companies have to apply the new rules of the CSRD. Under the NFRD, large companies have to publish information related to
- environmental matters
- social matters and treatment of employees
- respect for human rights
- anti-corruption and bribery
- diversity on company boards (in terms of age, gender, educational and professional background)
These reporting rules apply to large public-interest companies with more than 500 employees. This covers approximately 11 700 large companies and groups across the EU, including
- listed companies
- insurance companies
- other companies designated by national authorities as public-interest entities
Policy making timeline
- 31 July 2023Legislation - European sustainability reporting standards
- 9 June 2023Legislation - European sustainability reporting standards
Following the feedback period, the Commission will consider the feedback received before finalising the standards as delegated acts and submitting them to the European Parliament and Council for scrutiny.
- 14 December 2022Legislation - Corporate Sustainability Reporting
- 23 November 2022Standards - Corporate Sustainability Reporting
- 22 June 2022Legislation - Corporate Sustainability Reporting
- 21 April 2021Legislative proposal - Corporate Sustainability Reporting
Proposal for a Corporate Sustainability Reporting Directive (CSRD) to amend the reporting requirements of the NFRD.
- 8 March 2021Reports - EU sustainability reporting standards
- 20 February 2020Consultation - Non-financial reporting
End date: 11 June 2020
- 20 February 2019Consultation - Non-financial reporting
End date: 20 March 2019
- 18 June 2019Guidelines - Non-financial reporting
Guidelines on reporting climate-related information, which in practice consist of a new supplement to the existing guidelines on non-financial reporting, which remain applicable.
- 26 June 2017Guidelines - Non-financial reporting
Guidelines to help companies disclose environmental and social information. These guidelines are not mandatory, and companies may decide to use international, European or national guidelines according to their own characteristics or business environment.
- 28 January 2015Consultation - Non-financial reporting
End date: 15 April 2016
- 22 October 2014Legislation - Non-financial reporting
- 15 April 2014Frequently asked questions - Non-financial reporting
Delegated and implementing acts
- Original legislative proposal for the CSRD
- Impact assessment accompanying the legislative proposal for the CSRD
- Executive summary of the impact assessment accompanying the legislative proposal for the CSRD
- More on the legislative proposal for the CSRD
- Legislative initiative on corporate sustainability reporting
- Text of the NFRD (2014/95/EU)
- Summary of the legislation: Disclosure of non-financial and diversity information by large companies and groups
Transposition by EU Member States
- The NFRD was transposed by all EU Member states into their national law.
- Transposition history of the NFRD by EU Member States