Corporate reporting: large companies enter the 21st century
The Renew Europe Group in the European Parliament welcomes yesterday's inter-institutional agreement on the “Corporate Sustainability Reporting Directive”. This is the first ever legal text setting standardised and transparent reporting rules for big companies to disclose their impact on the environment, human rights and social standards across the value chain.
The 2021 Commission proposal was based on a parliamentary report issued by Renew Europe MEP Pascal Durand in 2020. One of the key changes is the introduction, from 2024, of a compulsory audit of sustainability information by large firms. For the first time that information will be verified.
MEP Pascal Durand (Liste Renaissance, France), Renew Europe rapporteur on the file, says:
“We find it normal that a company's books are verified by an auditor. Now, a company's record on sustainability will be audited too. Having a clean record on human rights will be just as important as having a clean balance sheet”.
Another key win for MEPs is that the new rules will also apply to non-EU companies active in the EU market. British, American or Chinese companies making more than 150m turnover in the EU will be required to publish equivalent sustainability information. Member states will collectively supervise compliance with the help of the Commission.
Progress on this proposal comes at a time where regulators all over the world are racing to define their own version of what corporate sustainability should mean.
"With this new piece of legislation the EU will set the tone of the global conversation on what sustainable standards should mean for the company of the 21st century”, adds Pascal Durand.