nach oben

Erschienen in:

2024 | OriginalPaper | Buchkapitel

6. Corporate Sustainability Reporting

verfasst von : Loes van Dijk, Steven Hijink, Lars in ’t Veld

Erschienen in: Sustainable Finance in Europe

Verlag: Springer International Publishing

Einloggen

Aktivieren Sie unsere intelligente Suche, um passende Fachinhalte oder Patente zu finden.

search-config

KI-gestützte Suche

Aus

Abstract

There has been a notable increase in recent years in legislative developments with respect to corporate sustainability reporting, aimed at requiring companies to report not only on financial information, but also on Environmental, Social and Governance (ESG) aspects of their business operations. In 2021, the European Commission published the proposal for the European Corporate Sustainability Reporting Directive (CSRD). Outside the European Union (EU), in 2021, the IFRS Foundation announced the establishment of the International Sustainability Standards Board (ISSB). Furthermore, in 2022, in the United States, the US Securities and Exchange Commission (SEC) proposed rules to enhance and standardize climate-related disclosures for investors. Based on the CSRD, the European Commission adopted the first set of European Sustainability Reporting Standards in July 2023. Also in 2023, the ISSB issued two standards on sustainability-related and climate-related disclosures. As a result, the requirements on corporate sustainability reporting both in the EU and globally are emerging rapidly. This chapter describes the scope and core elements of the CSRD and the ESRS. Before discussing these requirements in depth, we will describe the background of the CSRD. We will also briefly compare these European initiatives to the initiatives of the ISSB and SEC, and to currently existing non-binding frameworks and standards on sustainability reporting. We will conclude with some remarks on the strategic and organizational impact of the CSRD for companies and on the question whether the CSRD is contributing to the evolution of global corporate sustainability reporting standards.

Sie haben noch keine Lizenz? Dann Informieren Sie sich jetzt über unsere Produkte:

Springer Professional "Wirtschaft+Technik"

Online-Abonnement

Mit Springer Professional "Wirtschaft+Technik" erhalten Sie Zugriff auf:

über 102.000 Bücher
über 537 Zeitschriften

aus folgenden Fachgebieten:

Automobil + Motoren
Bauwesen + Immobilien
Business IT + Informatik
Elektrotechnik + Elektronik
Energie + Nachhaltigkeit
Finance + Banking
Management + Führung
Marketing + Vertrieb
Maschinenbau + Werkstoffe
Versicherung + Risiko

Jetzt Wissensvorsprung sichern!

Jetzt informieren

Springer Professional "Technik"

Online-Abonnement

Mit Springer Professional "Technik" erhalten Sie Zugriff auf:

über 67.000 Bücher
über 390 Zeitschriften

aus folgenden Fachgebieten:

Automobil + Motoren
Bauwesen + Immobilien
Business IT + Informatik
Elektrotechnik + Elektronik
Energie + Nachhaltigkeit
Maschinenbau + Werkstoffe

Jetzt Wissensvorsprung sichern!

Jetzt informieren

Springer Professional "Wirtschaft"

Online-Abonnement

Mit Springer Professional "Wirtschaft" erhalten Sie Zugriff auf:

über 67.000 Bücher
über 340 Zeitschriften

aus folgenden Fachgebieten:

Bauwesen + Immobilien
Business IT + Informatik
Finance + Banking
Management + Führung
Marketing + Vertrieb
Versicherung + Risiko

Jetzt Wissensvorsprung sichern!

Jetzt informieren

Vorheriges Kapitel The Role of EU Securities Regulation in Sustainable Corporate Governance

Nächstes Kapitel Integrating Sustainability in EU Corporate Governance Codes

Defined as companies whose shares or other securities are admitted to trading on a regulated securities market.

See paragraph 1.2, Conceptual Framework for Financial Reporting, IFRS Foundation 2018.

The GSSB is an independent operating entity under the auspices of the Global Reporting Initiative (GRI), an independent international organization that promotes sustainability reporting (see: www.globalreporting.org/about-gri/).

See the Guidance on Requirement 1.2 of GRI 101.

Directive (EU) 2022/2464 of the European Parliament and of the Council of December 14, 2022 amending Regulation (EU) No 537/2014, Directive 2004/109/EC, Directive 2006/43/EC and Directive 2013/34/EU, as regards corporate sustainability reporting (OJ 2022, L 322).

At the moment of writing, the adopted ESRS have not yet been published in the Official Journal of the European Union. For the text of the delegated regulation on the ESRS, see: https://finance.ec.europa.eu/regulation-and-supervision/financial-services-legislation/implementing-and-delegated-acts/corporate-sustainability-reporting-directive_en. Although the ESRS are formally issued by the European Commission, the drafts of these standards were materially written—in the CSRD referred to as (based on) ‘technical advice’—by (a project group of) the European Financial Reporting Advisory Group (EFRAG). These drafts were published in November 2022 (see: www.efrag.org/lab6). In this contribution these drafts are referred to as ‘draft ESRS’.

This paragraph and paragraph 2.2 are inspired on J.B.S. Hijink, ‘Towards European Accounting Law’, European Company Law 9, no. 4 (2012): 201–208.

Fourth Council Directive of July 25, 1978 based on Article 54(3)(g) of the Treaty on the annual accounts of certain types of companies (78/660/EEC) (OJ 1978, L 222; Fourth Company Law Directive), and Seventh Council Directive of June 13, 1983 based on Article 54(3)(g) of the Treaty on consolidated accounts (83/349/EEC) (OJ 1983, L 193; Seventh Company Law Directive), respectively.

Directive 2013/34/EU of the European Parliament and of the Council of June 26, 2013 on the annual financial statements, consolidated financial statements and related reports of certain types of undertakings, amending Directive 2006/43/EC of the European Parliament and of the Council and repealing Council Directives 78/660/EEC and 83/349/EEC (OJ 2013, L182; the EU Accounting Directive).

As referred to in Article 54 of the Treaty on the functioning of the European Union.

See Communication from the European Commission, Accounting Harmonization: a new strategy vis-à-vis international harmonization (COM(95)508 NL).

See Communication from the European Commission to the Council and the European Parliament, EU Financial Reporting Strategy: the way forward, Brussels, June 13, 2000 (COM(2000)359 final).

Proposal for a Regulation of the European Parliament and of the Council on the application of international accounting standards of February 13, 2001, (COM(2001)80 final).

Regulation (EC) No 1606/2002 of the European Parliament and of the Council of July 19, 2002 on the application of international accounting standards (OJ 2002, L 243) (IAS Regulation).

Please note that the IFRS have been drawn up by the IASB, which is a private organization, and that the standards issued by this organization do not directly apply to listed companies. The obligation to apply the standards does not arise until after the ‘adoption’ of the standards by the European Commission in accordance with (the mechanism incorporated in) the IAS Regulation.

Originally in Commission Regulation (EC) No 1725/2003 of September 29, 2003 adopting certain international accounting standards in accordance with Regulation (EC) No 1606/2002 of the European Parliament and of the Council (OJ 2003, L 261). This regulation was subsequently repeatedly amended and in 2008 superseded by Commission Regulation (EC) No. 1126/2008 of November 3, 2008 adopting certain international accounting standards in accordance with Regulation (EC) No 1606/2002 of the European Parliament and of the Council (OJ 2008, L 320). The latter regulation has meanwhile also repeatedly been amended, with a view to adding new ‘adopted’ EU IFRS, most recently by Commission Regulation (EU) No149/2011 of February 18, 2011 amending Regulation (EC) No 1126/2008 adopting certain international accounting standards in accordance with Regulation (EC) No 1606/2002 of the European Parliament and of the Council of July 19, 2002 on the improvement of International Financial Reporting Standards (IFRSs) (OJ 2011, L 46).

We do not elaborate on the impact of IFRS specifically for companies in the financial sector, like banks and insurance companies. Note however, as the European Commission describes in its Consultation Document ‘Fitness Check on the EU Framework for public reporting by companies’, published on March 21, 2018, p. 24 (EC Consultation Fitness Check), that “[f]ollowing the endorsement of IFRS by the EU in 2002 all large banks, accounting for more than 65% of total European banking assets, are obliged to use EU endorsed IFRS for their consolidated financial statements. In addition to the mandatory use of IFRS for the consolidated accounts by listed banks, 15 Member States currently require IFRS for the consolidated accounts of non-listed banks and 12 Member States require IFRS for the individual accounts of non-listed banks instead of national GAAP.“ Also for non-listed banks incorporated in the EU, the influence of IFRS is—thus—of importance. See: https://finance.ec.europa.eu/system/files/2018-03/2018-companies-public-reporting-consultation-document_en.pdf.

See www.rjnet.nl/.

Directive 2003/51/EC of the European Parliament and of the Council of June 18, 2003 amending Directives 78/660/EEC, 83/349/EEC, 86/635/EEC and 91/674/EEC on the annual and consolidated accounts of certain types of companies, banks and other financial institutions and insurance undertakings (OJ 2003, L 178).

Recital 9 of the Modernisation Directive.

Article 1 (14), respectively Article 2 (10) of the Modernization Directive. See: T.E. Lambooy, Corporate Social Responsibility. Legal and semi-legal frameworks supporting CSR (Instituut voor Ondernemingsrecht, nr. 77)(diss. Leiden), Deventer: Kluwer 2010, p. 147 and further.

Directive 2014/95/EU of the European Parliament and of the Council of October 22, 2014 amending Directive 2013/34/EU as regards disclosure of non-financial and diversity information by certain large undertakings and groups (OJ 2014, L330/1).

Large public-interest entities—as mentioned in Directive 2014/95/EU—are defined as undertakings that qualify as public-interest entity and which exceed on their balance sheet date the criterion of the average number of 500 employees during the financial year and either exceed a balance sheet total of EUR 20 million or a net turnover of EUR 40 million on the balance sheet date. As of December 24, 2023, the EU Accounting Directive has been amended to raise the size criteria, with the balance sheet total increased to EUR 25 million and net turnover to EUR 50 million, respectively.

See Article 19bis(1) and Article 29bis(1) of Directive 2013/34/EU. The requirement to publish a non-financial statement for large public-interest entities extends the requirement to include non-financial key performance indicators, including information relation to environmental and employee matters, in the analysis of the development and performance of the entity's business and position, as required by Article 19 of Directive 2013/34/EU.

See recital 3 in the preamble of the NFRD.

See Article 19bis(1) and Article 29bis(1) of Directive 2013/34/EU. Article 19bis(4) and Article 29bis(4) Directive 2013/34/EU allow Member States by way of an option to have companies subject to their national law to publish the non-financial statement in a separate report, provided that this separate report is published together with the management report. The Dutch legislature did not make use of this Member State option.

See Communication from the Commission, Guidelines on non-financial reporting (methodology for reporting non-financial information) (2017/C 215/01; (OJ 2017, C 215).

For instance, the UN Guiding Principles on Business and Human Rights implementing the UN ‘Protect, Respect and Remedy’ Framework and the UN Sustainable Development Goals.

E.g. the Guidelines for Multinational Enterprises of the OECD and the Guidance for Responsible Agricultural Supply Chains of FAO-OECD.

ISO 26000 of the International Organisation for Standardisation on social responsibility.

See: https://www.ilo.org/wcmsp5/groups/public/---ed_emp/---emp_ent/---multi/documents/publication/wcms_094386.pdf.

AFM, In balans, November 2016, p. 10.

In these terms, for example, Eumedion in December 2020, as quoted in L.J.M. Baks, J.B.S. Hijink & S. Rietveld, ‘Duurzaamheidsverslaggeving in een hogere versnelling. Laveren tussen wereldwijde convergentie en “Europe first”’, Ondernemingsrecht 2021/34, p. 205 (hereinafter: Baks, Hijink & Rietveld 2021).

See: Baks, Hijink & Rietveld 2021, in particular pp. 205–206.

See Action 9: ‘Strengthening sustainability disclosure and accounting rule-making’, p. 10–11 of the EU Action Plan Sustainable Finance.

Other actions announced in the EU Action Plan Sustainable Finance included the launch of the EC Consultation Fitness check in March 2018 (Action 9.1), including the evaluation of relevant aspects of the IAS-regulation (Action 9.6), see also our remarks in paragraph 2.4 above.

Action 9.2, p. 10 of the EU Action Plan Sustainable Finance.

See questions 41 till 43, on pages 29–30, of the EC Consultation Fitness Check.

Baks, Hijink & Rietveld 2021. See also L.J.M. Baks, L.K. van Dijk & J.B.S. Hijink, ‘Reuzestappen op het terrein van duurzaamheidsverslaggeving: de Europese CSRD en oprichting van de ISSB’, Ondernemingsrecht 2022/36 (hereinafter: Baks, Van Dijk & Hijink 2022) and L.K. van Dijk & J.B.S. Hijink, “Corporate Sustainability Reporting’: over de Europese aanzet voor het fundament van duurzaamheidsverslaggeving’, FR 2021, no 8/9 (hereinafter: Van Dijk & Hijink 2021).

For the ISSB's general sustainability reporting standard, see: https://www.ifrs.org/issued-standards/ifrs-sustainability-standards-navigator/ifrs-s1-general-requirements/. For the climate-related standard, see: https://www.ifrs.org/issued-standards/ifrs-sustainability-standards-navigator/ifrs-s2-climate-related-disclosures/.

Compare the information on the ISSB's website, available at: www.ifrs.org/news-and-events/news/2023/04/issb-decides-to-prioritise-climate-related-disclosures-to-support-initial-application/.

On which further: L.K. van Dijk & J.B.S. Hijink 2022, ‘Finalisering van de Europese CSRD: een mijlpaal voor duurzaamheidsverslaggeving met grote impact op het ondernemingsrecht van 2025’, Ondernemingsrecht 2022/87, pp. 627–628 (hereinafter: Van Dijk & Hijink 2022).

See: www.sec.gov/rules/proposed/2022/33-11042.pdf.

See media reports on this, among others (www.politico.com/news/2023/02/04/sec-climate-rule-scale-back-00081181 and www.wsj.com/articles/sec-considers-easing-climate-disclosure-rules-after-investor-pushback-11675416111?page=1).

On this in more detail, with further references, Baks, Van Dijk & Hijink 2022, p. 225.

We refer to our earlier comments in Baks, Van Dijk & Hijink 2022, p. 222–223 and 225. On these divergent points of departure also already Baks, Hijink & Rietveld 2021, p. 206.

Article 7 CSRD.

These are companies that meet two of the three size criteria: having (i) a balance sheet total of more than EUR 20 million; (ii) net turnover of more than EUR 40 million and/or (iii) an average number of employees of more than 250 for the financial year. As of December 24, 2023, the EU Accounting Directive has been amended to raise the size criteria, with the balance sheet total increased to EUR 25 million and net turnover to EUR 50 million, respectively.

Baks, Van Dijk & Hijink 2022, pp. 223–224. In the EU, it is expected that approximately 50,000 companies will fall within the scope of the CSRD.

In a new Article 1(3b) of the EU Accounting Directive.

Unless it is a listed micro-enterprise, see Article 40a(1) EU Accounting Directive.

See Chapter 9a of the EU Accounting Directive, consisting of Articles 40a to 40d.

See Article 19a(5) and (5a) of the EU Accounting Directive. The ‘light’ reporting regime may further be used by two specific types of companies that qualify as ‘large’. These are so-called ‘small and non-complex institutions’ (where the designation ‘small’ is part of the designation of this type of company and does not refer to a size qualification) and ‘(re)insurance captives’ (the latter being certain types of insurers that provide self-insured benefits).

Article 1(4) CSRD, leading to adaptation of Article 19a EU Accounting Directive. For the consolidated management report, the same is stipulated in Article 1(7) CSRD, leading to adaptation of Article 29a EU Accounting Directive. Only the (new) regulations applicable to the (separate) management report are referred to below.

On this, in addition to Van Dijk & Hijink 2022, see in similar terms: R.L. ter Hoeven, ‘Waarom de CSRD zoveel meer is dan een “disclosure” standaard’, MAB 97(1/2) 2023, p. 1–3.

On August 11, 2023, the IAASB proposed a draft International Standard on Sustainability Assurance (ISSA) 5000 with General Requirements for Sustainability Assurance Engagements. Stakeholders may provide feedback and insights on the draft ISSA 5000 until December 1, 2023, after which the final version of the ISSA 5000 is expected to be issued before the end of 2024.

In the literature, this process has been called ‘atypical’ for a reason, see: Van Dijk & Hijink 2022, p. 622.

See Article 17 CSRD, leading to amendment of Article 49 EU Accounting Directive, where it states that the European Commission, when adopting delegated acts, ‘shall take into account the technical advice of EFRAG’.

See further on (the run-up to) this role of EFRAG: L.J.M. Baks & J.B.S. Hijink, ‘Een Europese stroomversnelling op het terrein van duurzaamheidsverslaggeving—rapporteren van EFRAG en ESMA’, Ondernemingsrecht 2021/42, p. 250–255.

For EFRAG's April 2022 consultation version of the ESRS, see: www.efrag.org/lab3.

For a discussion of this criticism, see Van Dijk & Hijink 2022, p. 622.

See—for example—the joint response from the VNO-NCW and VEUO, available at: www.veuo.nl/uimg/veuoenterprise/b114689_att-veuo-brief-reactie-vnoncw-veuo-op-esrs-consultatie.pdf

See the AFM response (available at: www.afm.nl/~/profmedia/files/consultations/2022/reaction-afm-efrag.pdf?la=en-NL; ‘AFM response’), p. 2.

An example is Disclosure requirement S1-16 - Compensation indicators (pay gap and total compensation). The provision requires disclosure of the pay gap between men and women and of the difference between the highest-earning person in the organisation compared to median pay (pay ratio). The ESRS consulted in April 2022 included these disclosure requirements as separate disclosure requirements.

Commission Delegated Regulation (EU) …/… of 31.7.2023 supplementing Directive 2013/34/EU of the European Parliament and of the Counsel as regards sustainability reporting standards.

In addition, in ESRS 2, Appendix C lists the requirements in topical ESRS that are applicable jointly with ESRS and should therefore also be deemed to be material.

In the draft ESRS, select data point could already be applied on a voluntary basis. The distinction between mandatory and voluntary disclosure requirements is simply indicated by the use of the phrase ‘shall disclose’, signifying a mandatory requirement, in contrast to the phrase ‘may disclose’, which indicates a voluntary requirement.

For example, the designation ‘ESRS E1’ refers to the first thematic standard covering climate-related reporting requirements, and ‘ESRS G1’ to the thematic standard covering governance-related reporting requirements. The cross-cutting standards can be recognized by the absence of a designation letter: ESRS 1 ‘General requirements’ refers to the first cross-cutting standard.

Compare the European Commission's call to EFRAG at the end of March 2023: www.efrag.org/News/Public-416/European-Commission-calls-on-EFRAG-to-prioritise-implementation-support.

See ESRS 1, paragraphs 37–51, 119–122 and 123–129, respectively.

ESRS 2, Disclosure Requirement SBM-1 and Disclosure Requirement SBM-3. As part of this, disclosures should include information on the composition, role, knowledge and skills of the management board and supervisory board, including diversity (aspects) and responsibilities (ESRS 2 paragraphs 19–23).

ESRS 2, paragraphs 27–29.

ESRS 2, paragraphs 34–36.

It should be borne in mind that the extent to which companies have to comply with thematic ESRS is determined by the extent to which the obligations prescribed in an ESRS are deemed material.

See ESRS E1, paragraph 44–55.

For an insightful overview of this, see the report ‘The Evolution of Sustainability Disclosure: Comparing the 2022 SEC, ESRS, and ISSB Proposals’ (available at: https://www.sustainability.com/globalassets/sustainability.com/thinking/pdfs/2022/comparing-the-sec-efra-and-issb.pdf).

ESRS E4.

ESRS E5.

ESRS S1, paragraphs 95–99, paragraphs 35–43 and 95–100 respectively, as well as paragraphs 25–29.

ESRS S2. The information to be published pursuant to this standard is closely related to the European Commission's proposal for the Corporate Sustainability Due Diligence Directive (CSDDD), which proposal falls outside the scope of this chapter.

ESRS S3 and ESRS S4, respectively.

In the version of the ESRS consulted in April 2022, there were two thematic governance standards. In the adopted ESRS, the vast majority of the disclosure requirements that were included in ESRS G1 in the April 2022 version have been moved to ESRS 2, resulting in these disclosure requirements being deemed material for all companies, (see ESRS 1, paragraph 29).

ESRS G1, paragraphs 16–21.

See Baks, Van Dijk & Hijink 2022, p. 227 and, for example, Frederick Alexander, One Small Step from Financial Materiality to Sesquimateriality: A Critical Conceptual Leap for the ISSB (March 13, 2022, available at www.ssrn.com/abstract=4056602).

Illustrative of this is the title of the report of a meeting between ISSB's president—Emmanuel Faber—and the European Parliament: ‘The conflict between double & single materiality is more a narrative than a reality—ISSB's Faber tells MEPs’(www.corporatedisclosures.org/content/top-stories/the-conflict-between-double-and-single-materiality-is-more-a-narrative-than-a-reality-%E2%80%93-issbs-faber-tells-meps.html).

See: Baks, Hijink & Rietveld 2021, p. 214–215.

See, for example, Reuters’ coverage (available at: www.reuters.com/legal/legalindustry/will-secs-proposed-climate-risk-disclosure-rules-survive-supreme-court-scrutiny-2022-08-05/), of August 5, 2022: ‘Will the SEC's proposed climate risk disclosure rules survive Supreme Court scrutiny? ‘, following the US Supreme Court's ruling of June 30, 2022 on West Virginia versus the Environmental Protection Agency (www.supremecourt.gov/opinions/21pdf/20-1530_n758.pdf). The SEC has (reportedly partly for this reason) missed its original schedule for implementing the new obligations. See Bloomberg's coverage of October 19, 2022 (available at: https://news.bloomberglaw.com/us-law-week/sec-climate-rules-pushed-back-amid-bureaucratic-legal-woes).

However, it cannot be ruled out that the standards to be developed by the ISSB will become the point of reference for the European Commission when deciding—pursuant to the Article 19a/29a(7) of the EU Accounting Directive—whether companies from ‘third countries’ meet ‘equivalent’ standards in the field of sustainability reporting.

Titel: Corporate Sustainability Reporting
verfasst von: Loes van Dijk
Steven Hijink
Lars in ’t Veld
Verlag: Springer International Publishing
Buch: Sustainable Finance in Europe
Print ISBN: 978-3-031-53695-3

Electronic ISBN: 978-3-031-53696-0

Copyright-Jahr: 2024
DOI: https://doi.org/10.1007/978-3-031-53696-0_6

Springer Professional

Abstract

Bitte loggen Sie sich ein, um Zugang zu Ihrer Lizenz zu erhalten.

Sie haben noch keine Lizenz? Dann Informieren Sie sich jetzt über unsere Produkte:

Springer Professional "Wirtschaft+Technik"

Springer Professional "Technik"

Springer Professional "Wirtschaft"

Premium Partner