The CSRD is expected to have a larger scope than the current Non-Financial Reporting Directive, applying to all large or listed companies operating in the EU and seeking to bring sustainability reporting on a par with financial reporting.

Since its inception over 20 years ago GRI has supported the transition to mandatory sustainability reporting requirements, while freely providing sustainability standards that are widely and increasingly used by organisations voluntarily.

Key components of the CSRD:

• New EU sustainability reporting standards will be developed through a multi-stakeholder and transparent process, taking into consideration the GRI Standards and other reporting frameworks
• ‘Double materiality’ will be adopted, requiring public reporting on both sustainability factors affecting the company (financial materiality) and how the company impacts society and the environment (outward materiality)
• Reporting will be compulsory, with sustainability and financial information given ‘comparable status’, and a requirement that reported information should be audited and assured

Peter Paul van de Wijs, GRI Chief External Affairs Officer, said: “We are greatly encouraged that the European Commission is pressing ahead, at pace, with plans to significantly strengthen sustainability reporting in the EU. This legislation would introduce mandatory requirements for some 50,000 companies to disclose the full range of their impacts on people and planet, which is essential if the EU is to ensure meaningful progress in achieving the Green Deal.

The CSRD – which embraces multi-stakeholder, impact-focused reporting, positioning sustainability and financial reporting on an equal footing – closely aligns with the approach and scope of the GRI Standards, which are already voluntarily used by most large companies in Europe.

We look forward to working closely with EFRAG to co-design a sustainability reporting system that reflects the Commission’s ambitions for consistent and comparable reporting on corporate impacts, contributing to the next steps in the continued evolution of corporate reporting.”

78% of the world’s 250 largest companies report in accordance with the GRI Standards

References:

This article is based on published information by GRI. For the sake of readability, we did not use brackets or ellipses. However, we made sure that the extra or missing words did not change the publication’s meaning. If you would like to quote these written sources from the original please revert to the following link:

https://www.globalreporting.org/about-gri/news-center/gri-backs-mandatory-eu-reporting-on-sustainability-impacts/

The post GRI backs mandatory EU reporting on sustainability impacts appeared first on SustainCase - Sustainability Magazine.

Research also shows that when company boards approve non-financial reporting, it influences the way boards think about risk and opportunity and how they incorporate it into company strategies. When reporting becomes mandatory Boards do get involved and organisations access new information leading to better decision making. However, companies tend to ignore mandatory requirements if these are not enforced.

A more substantial EU NFR Directive (or Regulation) will help companies put a higher priority on social and environmental risks and opportunities that influence their ability to create value.

The NFR Directive must also take the opportunity to increase incorporation of the best of the most used frameworks and standards. These are the Global Reporting Initiative (GRI) Standards, the integrated reporting framework and the Taskforce on Climate-related Financial Disclosure Recommendations.

Why enforceable requirements are needed to make sure companies focus on environmental and social impacts

Last week there has been an insightful contribution to the debate about sustainability disclosure in the EU by Carol Adams, Professor of Accounting at Durham University Business School.

Writing for EURACTIV on 13 May (Europe needs mandatory non-financial reporting to underpin COVID recovery), Professor Adams sets out why, as part of the review of the EU’s Non-Financial Reporting (NFR) Directive, enforceable requirements are needed to ensure companies prioritise environmental and social impacts  Tweet This!.

As an academic in this field and a former chair of GRI’s Stakeholder Council, Carol Adams is well informed about corporate transparency and sustainability reporting. The key points she raises in her article:

• Transparent disclosure will not occur unless EU reporting requirements are mandatory and enforced by a pro-active regulatory body with powers to require changes.
• Endorsing the GRI Standards, developed through rigorous and independent processes mirroring those of accounting standards, in an updated NFR Directive would mean it stays up to date – so no need to keep revising legislation.
• The NFR Directive must incorporate the best of the most used frameworks and standards – which are the GRI Standards, the Integrated Reporting framework and TCFD. The alternatives ‘don’t ask the right questions’, have little traction with EU companies and are insufficient to alert corporate stakeholders on the impacts that matter.
• If companies do not disclose their material negative impacts it can lead to unsustainable activities – that’s bad for the European economy and bad for the environment and society.
• A more substantial NFR Directive can help companies help themselves – by making them put a higher priority on social and environmental risks and opportunities.

Mandating for comprehensive disclosure that is built on robust and multi-stakeholder standards, such as these provided by GRI, can be a catalyst for meaningful change, for a fairer and more sustainable post-COVID Europe.

78% of the world’s 250 largest companies report in accordance with the GRI Standards

SustainCase was primarily created to demonstrate, through case studies, the importance of dealing with a company’s most important impacts in a structured way, with use of the GRI Standards. To show how today’s best-run companies are achieving economic, social and environmental success – and how you can too.

Research by well-recognised institutions is clearly proving that responsible companies can look to the future with optimism.

FBRH GRI Standards Certified & ISEP recognised Sustainability Course | Venue: London LSE

By registering for the next 2-day FBRH GRI Standards Certified & ISEP recognised course you will be taking the first step in gaining the many benefits of sustainability reporting.

Most importantly, you will gain the knowledge to use the GRI Standards, project manage your own first-class sustainability report and:

• Identify your most important impacts on the Environment, Economy and Society
• Begin taking solid, focused, all-round sustainability action ASAP

References:

This article is based on published information by EURACTIV and GRI. For the sake of readability, we did not use brackets or ellipses. However, we made sure that the extra or missing words did not change the publication’s meaning. If you would like to quote these written sources from the original please revert to the following links:

https://www.euractiv.com/

https://www.globalreporting.org/Pages/default.aspx

The post Call for mandatory non-financial reporting in EU to underpin COVID recovery appeared first on SustainCase - Sustainability Magazine.