Companies in the EU are facing a radical shake-up to what they must disclose about the sustainability of their operations. Yvonne Holmes, Head of Group Sustainability for DCC plc, is all for it.
Corporate sustainability reporting is going through an overhaul. The EU is introducing the Corporate Sustainability Reporting Directive (CSRD) to replace 2014’s Non-Financial Reporting Directive (NFRD). Around four times as many businesses, including private companies and SMEs, fall into the CSRD’s scope, compared with the NFRD.
It's a get-real moment for several reasons. The new directive requires third-party verification of disclosures, which will also help address greenwashing concerns.
“It is starting to put non-financial information on the same footing as financial information. It requires more robust controls and assurance over the data and disclosures,” says Yvonne Holmes, Head of Group Sustainability DCC.
The new framework also makes it easier for investors and other stakeholders to compare company performance. One set of standards - the European Sustainability Reporting Standards (ESRS) - underpins the CSRD, replacing a bingo card of disparate voluntary standards that businesses could previously select from to frame their disclosures.