14 sty 2023
CSRD amendment to Accounting Directive
CSRD is the EU directive, adopted on 14 December 2022 on corporate sustainability reporting. It introduces obligations on certain entities to include in their management reports additional information on sustainability matters.
The sustainability matters are environmental, social and human rights, governance factors, respect for human rights, anti – corruption and anti – bribery matters.
The CSRD will replace the reporting obligations on “non – financial matters” which are currently burdening certain large undertakings, having more than 500 employees (currently around 11,700 entities across Europe). The current obligations are part of the Accounting Directive[1] as amended by NFRD[2]. The assumption behind the sustainability reporting is that it will be more detailed, unified and will meet the Union’s needs for sustainability reporting, as the existing standards are insufficient.
The Commission will adopt sustainability reporting standards by 30 June 2023 and further adopt even more specific reporting standards by 30 June 2024.
With respect to environmental issues, the standards will specify the scope of undertakings’ disclosure information on: (i) climate change mitigation (ii) climate change adaptation (iii) water and marine resources (iv) resource use and the circular economy (v) pollution (vi) biodiversity and ecosystems.
With respect to social and human rights factors, the standards will specify the scope of undertakings’ disclosure information on: (i) equal treatment and opportunities (for all, including gender equality and equal pay for work of equal value, training and skills development, the employment and inclusion of people with disabilities, measures against violence and harassment in the workplace and diversity (ii) working conditions, including secure employment, working time, adequate wages, social dialogue, freedom of association, existence of works councils, collective bargaining, including the proportion of workers covered by collective agreements, the information, consultation and participation rights of workers, work-life balance, and health and safety; (iii) respect for the human rights, fundamental freedoms, democratic principles and standards established in the International Bill of Human Rights and other core UN human rights conventions, including the UN Convention on the Rights of Persons with Disabilities, the UN Declaration on the Rights of Indigenous Peoples, the International Labour Organization’s Declaration on Fundamental Principles and Rights at Work and the fundamental conventions of the International Labour Organization, the European Convention for the protection of Human Rights and Fundamental Freedoms, the European Social Charter, and the Charter of Fundamental Rights of the European Union.
With respect to reporting on governance factors, the standards will guide the undertakings on disclosure of the following information: (i) the role of the undertaking’s administrative, management and supervisory bodies with regard to sustainability matters, and their composition, as well as their expertise and skills in relation to fulfilling that role or the access such bodies have to such expertise and skills; (ii) the main features of the undertaking’s internal control and risk management systems, in relation to the sustainability reporting and decision-making process; (iii) business ethics and corporate culture, including anti-corruption and anti-bribery, the protection of whistleblowers and animal welfare; (iv) activities and commitments of the undertaking related to exerting its political influence, including its lobbying activities; (v) the management and quality of relationships with customers, suppliers and communities affected by the activities of the undertaking, including payment practices, especially with regard to late payment to small and medium-sized undertakings.
The full name of the directive is: Directive (EU) 2022/2464 of the European Parliament and of the Council of 14 December 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
Please find more information also in my article on page 11 at Poland Weekly here: https://polandweekly.com/wp-content/uploads/2023/01/PW_1.pdf
[1] https://en.lawforpleasure.com/items-1-1/accounting-directive-
[2] https://en.lawforpleasure.com/items-1-1/nfrd-directive-introducing-non---financial-reporting-obligations