EU ESG Reporting Guidelines
Introduction. In recent years, investors and other stakeholders have placed a greater emphasis on environmental, social, and governance (ESG) reporting as a means of gaining insight into a company's long-term viability and the effects they have on the environment and society. We will talk about the new EU ESG reporting regulations and their effects on businesses in this blog post.
EU ESG reporting guidelines overview. The new EU ESG reporting regulations will increase the transparency and comparability of benchmark methodologies relating to environmental, social, and corporate governance (ESG) metrics, requiring ESG reporting on a level that has never been seen before. This will give investors clarity on the environmentally sustainable nature of their investments. The European Sustainability Reporting Standards ("ESRS"), a first set of draft standards, were submitted to the Commission for review by the European Financial Reporting Advisory Group (EFRAG). After consulting with other EU bodies and Member States, the Commission is anticipated to adopt them in June 2023.
ESRS, or European Sustainability Reporting Standards. The new EU ESG reporting regulations will be put into effect using the ESRS, a set of standards. They are made to offer businesses a common language to report on their sustainability performance, making it simpler for investors to compare businesses across industries and regions. The ESRS cover many different subjects, such as climate change, biodiversity, human rights, workplace policies, and anti-corruption.
SDG metrics. The new EU ESG reporting regulations will require businesses to report on a variety of ESG metrics. The company's size, industry, and location will all affect these metrics differently. The following are a few ESG metrics that businesses may be required to report on.
Carbon dioxide emissions.
Consumption of energy.
Drinking water.
Waste production.
Diversity among the workforce.
Safety and health issues.
Human rights abuses.
Measures to fight corruption.
Compliance.
Companies will need to use the ESRS to report on their sustainability performance in order to abide by the new EU ESG reporting regulations. The Commission is anticipated to adopt the ESRS in June 2023, and companies will be required to begin reporting in accordance with the new regulations as of 2024.
Conclusion. For increasing transparency and comparability in ESG reporting, the new EU reporting regulations are a significant advancement. These regulations will contribute to positive change towards a more sustainable future by giving investors clarity on the environmental sustainability of their investments.
Sources:.
Sustainable finance - European Commission. European Sustainability Reporting Standards are developed by the European Financial Reporting Advisory Group. The new EU ESG disclosure requirements for Deloitte.
