The Corporate Sustainability Reporting Directive (CSRD)

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To date certain Insurance and Banking undertakings have been subject to the EU’s “NFRD” (Non-Financial Reporting Directive) which applied to circa 11,000 EU entities. The Corporate Sustainability Reporting Directive (CSRD) will replace the NFRD and requires entities in scope to include sustainability reporting disclosures across Environmental, Social and Governance (ESG) topics within their annual management report covering both financial impacts and impacts on people and the environment.

Until now information produced under NFRD has been qualitative, lacked uniformity and has been difficult to assess from a sustainability perspective. Entities could apply a range of reporting frameworks or reference points to their sustainability statements such as the GRI framework (Global Reporting Initiative) or the United Nations Sustainability Development Goals (UN SDGs) with no mandatory reporting standards in the EU in existence.