The transformative power of the CSRD - Part 1: The regulation itself
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The transformative power of the CSRD - Part 1: The regulation itself One cannot understand the purpose and spirit of the Corporate Sustainability Reporting Directive (#CSRD) without knowing the context in which it was created - which is the EU's comprehensive policy agenda on #sustainablefinance called the EU Sustainable Finance Action Plan. The CSRD represents a step change in corporate disclosures In a nutshell, it epitomizes the transformation of corporate sustainability reporting we are witnessing to #mandatory, #standardized, #audited, and #digitized disclosures. 👉 #Mandatory – makes disclosures widely available by applying to more than 45,000 companies both public and private, large and small, including roughly 10,000 non-EU companies that have operations or revenues in the European Union; all these companies will be legally obligated to publicly disclose sustainability information. 👉 #Standardized – makes disclosures comparable by making it compulsory for all these companies to use the same specific set of reporting standards. 👉 #Audited – makes disclosures reliable by making it compulsory for all these companies to have their standardized disclosures externally assured. 👉 #Digitized – makes disclosures discoverable and shareable by making it compulsory for disclosures to be delivered in a digitized and XBRL-tagged format, so that they are readable by both humans and machines. While much attention is currently given to compliance with the requirements of the European Sustainability Reporting Standards (#ESRS), which prescribes the information that companies need to disclose, one should not underestimate the challenges associated with achieving #externalassurance of those disclosures, which promises to be equally comprehensive, because it will include the process by which material issues are determined, the level of application of the standards, the digitization of the disclosures, and even compliance with reporting requirements under Article 8 of the EU’s Taxonomy Regulation. As the proverb goes... the only way to tackle this is to take one bite at a time. Read the full article here: https://lnkd.in/e5GUT9nd ------ The contents of this article are inspired by the Seizing the Corporate Sustainability Reporting Directive (CSRD) opportunity white paper, which provides companies with practical guidance on how to identify compliance gaps and build a roadmap to fill them and take control of their CSRD journey to achieve lasting sustainability leadership. You can download it here: https://lnkd.in/dxdZz3kM Photo by Arisa Chattasa on Unsplash