The EU's new sustainability directive, CSRD.
The EU has a new directive, the Corporate Sustainability Reporting Directive (CSRD). It will amend the previous Non-Financial Reporting Directive (NFRD).
So, what exactly is it? And what does it mean for our continued push to a sustainable future?
The CSRD came into effect in October 2022 and supports the European Green Deal, which aims for net zero emissions of greenhouse gases by 2050.
Net Zero emissions: cutting greenhouse gas emissions to as close to zero as possible, with any remaining emissions re-absorbed from the atmosphere, by oceans and forests for instance.
The CSRD applies to all listed companies on the EU-regulated markets, the companies that Savvy is looking to help you invest in.
The CSRD exists to help make sure that companies are disclosing enough information about the sustainability of their business. This includes the risks and opportunities they face.
- The directive states that sustainability reporting should be “comparable, reliable and easy for users to find and make use of with digital technologies”.
- Making sure that companies are reporting in a way that we can all understand is one of the keys to transparency. If we understand their sustainability metrics, it makes it a lot easier to invest in them and be sure we know how our investment is being put to use.
COMPANIES WILL HAVE TO FOLLOW SUSTAINABILITY REPORTING STANDARDS.
The sustainability reporting standards shall ensure the quality and relevance of reported information, by requiring that it is understandable, relevant, verifiable, comparable and represented in a faithful manner.
The directive aims to reduce unnecessary costs associated with sustainability reporting, making it easier for companies to report and for the public to access the data.
Significant investment is needed to make the EU financial system sustainable and ensure Europe is climate-neutral by 2050. CSRD will ensure we have better transparency to measure how we are progressing and where needs to be improved.