In the first of a series of three Sustainability Matters podcasts dealing with ESG disclosures worldwide, we put the spotlight on Europe and the new Corporate Sustainability Reporting Directive (CSRD for short). Bruno Sarda is joined by Dr. Christian Orth, EY Global Solution Leader for Sustainability Reporting and Assurance, and Elodie Timmermans, EY Americas Nonfinancial Reporting Assurance and Advisory Leader, who looks at the implications for businesses in North America.
What is the CSRD and what is it trying to achieve? Christian guides us through the many acronyms involved and gives his insight into the evolution of ESG disclosures in Europe. The new directive is a vital component of the European Green Deal which seeks to make the EU the world’s first carbon-neutral trading block. The guests discuss the huge increase in the number of businesses that will be affected and the compliance timelines.
The CSRD won’t only affect European enterprise. Elodie outlines implications for non-EU businesses that have subsidiaries or operations in the EU. The guests also discuss how the CSRD aligns with other global initiatives such as the ISSB and SEC.
Businesses will need to prepare for a new age of sustainability disclosures. ESG reporting will not simply be the domain of the Chief Sustainability Officer, but the entire enterprise will need to become aligned to sustainability goals and disclosures. Implementation will have a major impact on operations and the time to set up steering committees and working groups is now.
Key takeaways
- The CSRD is an important part of delivering the European Green Deal - the journey to a carbon-neutral Europe.
- It encompasses not just climate change but broader Environmental, Social and Governance metrics.
- It will dramatically increase the number of businesses who are subject to mandatory ESG disclosures from 15,000 to over 50,000.
- CSRD will impact non-EU companies, called Third-country companies, that have substantial activity in the EU.
- Businesses should prepare now, aligning finance and sustainability teams and involve the C-suite.
- Successful reporting needs a holistic approach that involves the entire organization.
© 2023 Ernst & Young LLP
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