European Business Aviation Association (EBAA) ’s Post

On 24 July 2024, four months after the publication of the draft bill, the German Federal Cabinet adopted the government draft to transpose CSRD into German law. In doing so, the EU Member State fell short of the EU deadline (6 July 2024) by just over 2 weeks. Germany represents 24% of all EU CSRD report preparers and more than 11 000 undertakings (CEPS 2022). The government draft was published on the website of the German Federal Ministry of Justice together with a synopsis and an information paper: https://lnkd.in/eKY4hUGv The information paper is interesting. It specifies that CSRD is transposed according to the so-called “1:1 principle”, meaning that the requirements of European law should not be exceeded: “The burdens of EU law should not be increased by national regulatory ambitions, as was often the case in the past through so-called ‘gold plating’.” The paper also answers the question “why did Germany not prevent the directive from being adopted at EU level?”: “The CSRD negotiations were already largely conducted by the previous government. They were practically completed when the new federal government came into office. It would have isolated Germany if it had tried to stop what the previous government had promised at the last minute.” “A German rejection would not have prevented the adoption of the CSRD. The federal government therefore decided to participate constructively in order to at least push through improvements to the drafts in favor of companies.” The information paper also specifies that: “The extent of the reporting obligations is largely determined by the European sustainability reporting standards, which were only adopted as a delegated act in 2023 - one year after the agreement on the directive. The Federal Government did not support the decision on the European sustainability reporting standards.” Source: https://lnkd.in/e79G4usp   Stay tuned for more CSRD and ESRS insights.    #getCSRDready, #CSRD, #ESRS, #CSDDD, #ESG, #Strategy, #Governance, #SustainabilityReporting, #Digitalisation, #CleeritESG

Strengthening alignment between the updated OECD Guidelines and legislative initiatives in the Netherlands and the EU A new OECD Watch report carefully examines why and how to align the draft EU Corporate Sustainability Due Diligence Directive with the OECD Guidelines focusing on important areas of concern. Some conclusions: The Dutch bill is clearly the most aligned with the OECD Guidelines, meaning that lawmakers in the European Commission, European Council, and European Parliament should take good note of the Dutch bill's approach as the negotiations in the EU trialogue continue. And Dutch lawmakers should push forward with turning the Dutch bill into law. See the overview below and delve into the full publication here!

Results from the second EY EU Taxonomy Barometer found there is still scope for clarification of sustainable economic activities. Among other benefits, aligning to the EU Taxonomy can support businesses to access green financing and funding. #Sustainability #Tax

Christmas gift to the financial issuers by the EU commission 🎅🎁 NB! This post is related to financial issuers that are in the scope under the EU Taxonomy. Last year, the European commission issued two FAQ just days before the christmas holidays. FAQs that were relevant for the reporting that occured for some issuers only a month later (read: really late FAQs issued). And Oops, - they did it again... The European commission just released today a FAQ for financial issuers of the EU Taxonomy. Purpose of this Notice is to provide further interpretative and implementation guidance to financial undertakings in the form of replies to Frequently Asked Questions (FAQs) on the reporting of their KPIs under the Disclosures Delegated Act. The replies to FAQs provided in this Notice clarify the rules already contained in the applicable legislation. With that said, please note that we did observe FAQs last year, that completely changed that way the legislation was initially understood and interpreted. Henrik Christian Grønnegaard, Mads Stærdahl Rosenfeldt, Marie Voldby, Mads Berendt Søndergaard, Helena Broadbridge (Barton), Oscar Marin, Kristian Ehrenreich Hansen

In December, I posted on the provisional agreement reached on new EU rules on responsible business conduct to be implemented through the Corporate Sustainability Due Diligence Directive (CSDDD) and noted that it was subject to approval by the co-legislators, a process usually regarded as a formality. At that stage, it could hardly have been anticipated the rollercoaster journey the legislation would still have undertake before being finalised - cancelled votes, outright rejection, and frantic last minute negotiations and amendments in the face of a legislative cliff edge. And while the journey has not yet reached its destination with European Parliament approval still outstanding, a significant hurdle was overcome on Friday with the approval by the European Council of a revised CSDDD containing a number of significant concessions to Member States that had voiced concerns about the impact of the legislation on EU industry. These are reported to include: 💥 reduced scope with only companies with a turnover in excess of €450 million and more than 1000 employees being within scope with the lower thresholds applicable to high impact sectors being deleted (it has been reported that this reduces the number of companies in-scope by nearly 70% when compared to the text agreed in December) 💥 extended phase-in provisions with companies with more than 5,000 employees and €1.5 billion turnover having 3 years to comply with the directive, those with over 3,000 employees and €900 million turnover having 4 years with the remaining companies having 5 years 💥 deletion of provisions requiring larger companies to “promote the implementation” of a climate transition plan through internal financial incentives Notwithstanding these concessions, the implementation of CSDDD represents a watershed moment for corporate accountability and it’s likely that companies will start taking early steps to align themselves with its requirements despite the long lead-in period, including by reference to the UN Guiding Principles and OECD Guidelines for multinational enterprises. https://lnkd.in/eX5tmh3U #csddd

By far, the biggest roadblock I’ve noticed for companies trying to tackle EU Taxonomy isn’t even about EU Taxonomy. It’s deciding which of their entities are considered to be in-scope for CSRD, and thus EU Taxonomy. This is especially a big question for international companies with multiple entities within their organization. Per CSRD, one of the entities subject to reporting are "large undertakings", based in the EU. Large is defined as exceeding two of the following size criteria: - Balance sheet total of 25 million euros - Net turnover of 50 million euros, and - Average number of employees to be over 250 But there’s the plot twist for “parents of large groups” as well. These are also in-scope of CSRD. A "large group" is defined as a group consisting of parent and subsidiary entities that, together, meet at least two of the three size criteria above. The thing with a parent of a large group is that all of its “children” or subsidiaries are now within scope of CSRD. Even if they didn’t meet the criteria before! 🤯 Is your head spinning yet? You’re not alone. It is complex, requires legal counsel, lots of planning, and maybe some wine. There are many nuances that I didn't share here and a million more I'm still learning about. But, thankfully, there’s guidance from PwC that is supremely helpful. They even provide multiple scenarios. Link in the comments! Photo: PwC guidance on scope.

CSDDD update: Provisional agreement has been reached on the EU Corporate Sustainability Due Diligence Directive. Article enclosed below provides a head-up on what is stabilized to date no matter what: - The agreement applies to large companies and includes thresholds for "high-risk" sectors. - The financial sector is temporarily excluded, but there will be a review clause for possible future inclusion. - The scope in the value chain includes activities such as transportation and storage. Companies will be required to adopt a climate transition plan aligned with the directive. Environmental impacts are defined as measurable degradation. - New elements have been added for human rights, liability is limited to cases of intent or negligence, and disengagement from business partners is required in certain cases. - Risk-based due diligence is a duty and non-compliance will be sanctioned with penalties. - Compliance with the directive can be a criterion for access to public procurement. - Directors duties have been deleted from the directive. Technical negotiators will need to finalize the text and it will then be endorsed and adopted by the European Parliament and member states.

Such great news that the planned European 🇪🇺 #supplychain #duediligence law #CSDDD has overcome one of the last hurdles to implementation! 👍 It will require all of us to integrate more systematic vigilance into our supply chain processes and risk management.

Findings of the EY EU #Taxonomy Barometer indicate that companies in scope of the Taxonomy may have to set up new internal processes to comply. Read more: #EUTaxonomy #sustainability

Read this important message from Heidi Hautala