The Current State & Bold Future of ESG Regulations Around Europe
Mandatory environmental, social and governance (ESG) reporting for companies across Europe is in the midst of an unprecedented transformation. In line with its ambitious climate, sustainability and human rights targets, the European Union (EU) has been introducing stricter, more specific disclosure requirements for businesses, most notably in the form of the Corporate Sustainability Reporting Directive (CSRD), which comes in to expand upon and replace existing non-financial reporting requirements, and the Sustainable Finance Disclosure Regulation (SFDR) and EU Taxonomy requirements, which aim to promote the move towards more environmentally sustainable investments.
The EU aims to achieve its overarching goals by pushing for a greater level of standardisation, particularly when it comes to how companies report on ESG related issues. In order to do this, it is faced with the significant challenge of bringing its many member states, each with their own history and approach to ESG issues, in line with one another.