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EU Corporate Sustainability Reporting
The EU sustainability reporting requirements are relevant to many Swiss businesses as they have operations in the EU.
EU rules require large companies to publish regular reports on the social and environmental impacts of their activities.
EU law requires certain large companies to disclose information on the way they operate and manage social and environmental challenges.
This helps investors, civil society organisations, consumers, policy makers and other stakeholders to evaluate the non-financial performance of large companies and encourages these companies to develop a responsible approach to business.
Directive 2014/95/EU Search for available translations of the preceding link – also called the Non-Financial Reporting Directive (NFRD) – lays down the rules on disclosure of non-financial and diversity information by certain large companies. This directive amends the Accounting Directive 2013/34/EU Search for available translations of the preceding link.
Companies that must comply
EU rules on non-financial reporting currently 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
- banks
- insurance companies
- other companies designated by national authorities as public-interest entities
Information to be disclosed
Under Directive 2014/95/EU, 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)
Accompanying guidelines
In June 2017 the European Commission published its guidelines to help companies disclose environmental and social information Search for available translations of the preceding link. These guidelines are not mandatory and companies may decide to use international, European or national guidelines according to their own characteristics or business environment.
In June 2019 the European Commission published guidelines on reporting climate-related information Search for available translations of the preceding link, which in practice consist of a new supplement to the existing guidelines on non-financial reporting, which remain applicable.
Proposal for a Corporate Sustainability Reporting Directive (CSRD)
On 21 April 2021, the Commission adopted a proposal for a Corporate Sustainability Reporting Directive (CSRD) Search for available translations of the preceding link, which would amend the existing reporting requirements of the NFRD. The proposal
- extends the scope to all large companies and all companies listed on regulated markets (except listed micro-enterprises)
- requires the audit (assurance) of reported information
- introduces more detailed reporting requirements, and a requirement to report according to mandatory EU sustainability reporting standards
- requires companies to digitally ‘tag’ the reported information, so it is machine readable and feeds into the European single access point envisaged in the capital markets union action plan Search for available translations of the preceding link
EU sustainability reporting standards
The Commission’s proposal for a Corporate Sustainability Reporting Directive (CSRD) Search for available translations of the preceding link envisages the adoption of EU sustainability reporting standards. The draft standards would be developed by the European Financial Reporting Advisory Group (EFRAG).
The standards will be tailored to EU policies, while building on and contributing to international standardisation initiatives.
The first set of standards would be adopted by October 2022.