CSR EU guideline: equality of non-financial and financial reporting. We accompany you in the expansion of your report!
On April 21, 2021, the European Commission presented a draft to amend the CSR Directive. The changes in the draft equate non-financial and financial reporting. This is intended to ensure transparency with regard to the sustainability of the reporting companies and also to dissolve the two-class society between the two categories. From the 2023 reporting period, several thousand companies in Germany will also be required to report outside of finance.
Capital market-oriented companies, credit institutions and insurance companies have been obliged to follow this path in the EU since 2017. The amendments to the statutes are also intended to address the criticism of investors and stakeholders, for example to create a comparability of reports across companies or to bring reliability and meaningfulness to the determination of non-financial key figures. In addition, it was criticized that the group of reporting companies was not too small.
The EU has accepted this criticism and is reforming sustainability reporting:
Clear responsibilities are to be defined, from creation to monitoring to verification of sustainability reporting. Alignment with the EU Action Plan on Sustainable Finance / EU Green Deal will also take place at the same time. This should lead to a clear meaningfulness across all sectors.
The most important changes at a glance:
Extension of reporting agents
In the future, more companies will have to prepare and publish the sustainability report. The size of the company remains a focus and has been reduced from 500 employees to 250 employees. This change has a very strong impact on medium-sized and family-run companies.
Extension of the report content
Through binding standards, the CSR report should not only experience standardization across the economy, but also move from qualitative to quantitative reporting. Corresponding key figures should then also be collected and reported for this purpose.
Responsibility for decision-makers and the supervisory board, as well as external audit
Some companies already measure their decision-makers using sustainability indicators. The targeted EU directive should make the management of a company bindingly responsible for the sustainability reports. Thus, the responsibility in a company should be clearly anchored in the top management. By including sustainability indicators in the report, the balance sheet oath leads to responsibility here as well. The Supervisory Board continues to serve as a control body. In addition, the report should be subject to external auditing requirements and thus be verified by external auditors.
Overall, the ambitious schedule will pose major challenges for companies. If the proposal is passed according to plan in 2021 and the member states have converted the guidelines into national law in 2022, then the changes will come into force for the 2023 reporting period.
We advise you with our specialized reporting knowledge and are happy to accompany you on the way to expanding the balance sheet with non-financial key figures.
Further information:
https://ec.europa.eu/commission/presscorner/detail/en/ip_21_1804