Commission adopts Regulation on EU sustainability reporting standards

The European Commission has adopted its Commission Delegated Regulation, setting out the first set of EU sustainability reporting standards ("ESRS"), together with a Q&A. The Corporate Sustainability Reporting Directive (EU) 2022/2464) ("CSRD") introduces requirements for in-scope companies to report against the ESRS. The standards cover the full range of environmental, social, and governance issues, including climate change, biodiversity and human rights. In the Delegated Regulation the Commission has modified EFRAG's draft ESRS by phasing-in certain reporting requirements; giving companies more flexibility to decide exactly what information is material to their circumstances; and making some requirements voluntary.

Mairead McGuinness, Commissioner for Financial Services, Financial Stability and Capital Markets Union, commenting on adoption of the Delegated Regulation has said: “The standards we have adopted today are ambitious and are an important tool underpinning the EU’s sustainable finance agenda. They strike the right balance between limiting the burden on reporting companies while at the same time enabling companies to show the efforts they are making to meet the green deal agenda, and accordingly have access to sustainable finance.”

The European Parliament and the Council will now formally scrutinise the Delegated Regulation for two months, extendable by a further two months.