The impact of the new framework
The new framework will see the rollout of the disclosure principle called ‘ double materiality ’ which requires companies to report on how sustainability issues impact their business and how their operations in turn affect people and the planet .
“ These new regulations update previous corporate sustainability reporting under the 2014 Non-Financial Reporting Directive ( NFRD ),” Knapp explains . “ The NFRD is a regulatory framework that mandates sizable public interest entities to report on their sustainability performance in 2018 – which some companies will already have been following .
“ In being more ambitious than NFRD , with advanced rules that extend beyond the continent , CSRD regulations pitch Europe as a frontrunner in the reporting standards space – laying the foundation globally .”
The impact of the new framework
“ Introducing a consolidated , robust and effective reporting framework though the use of purpose-built software solutions will help to address many issues surrounding conflicting standards ”
CHARLIE KNAPP
SENIOR PRODUCT MARKETING MANAGER , INTELEX TECHNOLOGIES
Compared to 12,000 companies reporting under the NFRD , almost 50,000 companies are expected to be impacted by the CSRD , making up 75 % of business in the EEA .
The new reporting rules initially apply to large public-interest companies with more than 500 employees :
• Companies listed on regulated markets in the EU ( apart from listed micro-enterprises ) and large companies
• Listed small- and medium-sized enterprises ( SMEs ), although there will be a transitional period when SMEs can opt out until 2028
• Non-EU companies with a net turnover of € 150m in the EU , and with at least one subsidiary or branch in the union