Corporate Sustainability: CSRD Directive and Its Impact on European Companies

The European Sustainability Reporting Standards (ESRS) were adopted by the European Commission in July 2023 and are essential for companies under the Corporate Sustainability Reporting Directive (CSRD). These standards, developed by EFRAG, will be implemented in phases starting from January 2024 and are divided into three categories: cross-cutting, thematic, and sector-specific. The goal is to improve the transparency and comparability of sustainability information, covering environmental, social, and governance (ESG) aspects. The development process of the ESRS includes public consultations and collaboration with various stakeholders. Sector-specific standards, tailored for industries such as mining, oil, gas, transportation, and agriculture, ensure that companies disclose relevant information according to their sector. The CSRD expands sustainability disclosure requirements, obligating large companies and listed SMEs to produce detailed reports on their environmental and social impacts. Implementation will occur in three phases until 2026, with independent audits to ensure report accuracy. EFRAG plays a crucial role in this process, advising the European Commission and developing sustainability standards that ensure consistent and comparable information at the European level. The adoption of these standards not only strengthens corporate transparency and accountability but also drives companies towards more sustainable practices, aligned with the goals of the European Green Deal and the European Climate Law.