How CSRD Compares to the SEC’s Proposed Rule
- Both the CSRD and the SEC's proposed rule aim to standardize corporate sustainability disclosure.
- The SEC focuses mainly on "climate-related risks," while the CSRD has a broader scope, including social and environmental information.
- CSRD requires a "double materiality" perspective, meaning companies must report both how sustainability issues affect their business and how their business impacts people and the environment.
- CSRD mandates third-party audits of sustainability information, going beyond the SEC's proposed rule.
Why CSRD Matters to U.S. Companies
- CSRD applies to U.S. companies with substantial activity in the EU, including those with a net turnover of €150 million in the EU for each of the last two consecutive years.
- CSRD reporting covers the organization at a consolidated level, not just the EU-based subsidiary or branch. This means U.S. companies with significant turnover in the EU must publish sustainability information that covers their entire operations, including non-EU operations.
Important Dates and Reporting Information
- CSRD entered into force on January 5, 2023.
- By June 30, 2024, the European Commission will adopt CSRD sustainability reporting standards for non-EU companies.
- Starting January 1, 2028, U.S. companies meeting the criteria will have to start reporting according to the European Sustainability Reporting Standards (ESRS) at a consolidated group level.
Questions for U.S. Companies to Consider
- Companies should assess their current materiality data points with CSRD’s double-materiality requirements.
- They should also evaluate whether they have the right data solutions, controls, and partners to start collecting the required sustainability data and provide an audit of the information they report.
コメント