7 December 2022

EU enhances resolve against greenwashing

The Council of the European Union has joined the European Parliament in adopting the EU Corporate Sustainability Reporting Directive (CSRD), which will replace the Non-Financial Reporting Directive (NFRD). This follows their  political agreement on the CSRD in June.

The CSRD will oblige companies to regularly disclose information on the social and environmental impacts of their business activities.

“The new rules will make more businesses accountable for their impact on society and will guide them towards an economy that benefits people and the environment,” said Jozef Síkela, Czech minister for industry and trade.

The application of the regulation will take place in four stages:

  • reporting in 2025 on the financial year 2024 for companies already subject to the NFRD;
  • reporting in 2026 on the financial year 2025 for large companies that are not currently subject to the NFRD;
  • reporting in 2027 on the financial year 2026 for listed SMEs (except micro undertakings), small and non-complex credit institutions and captive insurance undertakings;
  • reporting in 2029 on the financial year 2028 for third-country undertakings with net turnover above 150 million in the EU if they have at least one subsidiary or branch in the EU exceeding certain thresholds.

The European Commission presented the CSRD proposal on 21 April 2021 as part of the European Green Deal and the Sustainable Finance Agenda.