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The Corporate Sustainability Reporting Directive (CSRD) – Considered a Game-Changer in the Field of External Corporate Reporting

June 17, 2022

The CSRD, which is expected to be adopted in the next few weeks, will probably lead to one of the largest market interventions by the European Union in the external reporting of companies in recent decades.

The European Commission (EC) justifies this regulatory market intervention with the fact that the quality and comparability of the previous non-financial statement according to the Non-Financial Reporting Directive (NFRD) is not sufficient.

In the CSRD detailed explanatory memorandum, the following objectives are mentioned in particular, which the EC is trying to achieve with the CSRD:

  • The CSRD intends to significantly contribute to the implementation of the ambitious EC Green Deal project to create a fully sustainable economic and financial system within the European Union.
  • Sustainability-related corporate information is to be placed on an equal footing with financial-related information (so-called “level playing field”).
  • The provision and use of sustainability information is to be significantly improved through the use of digital technologies
  • Reporting should provide reliable, comparable and relevant information on risks, opportunities and impacts of aspects relevant to sustainability..
  • Meeting the increasing needs of users (e.g. banks, investors, employees, customers) in terms of sustainability information.
  • Closer linkage (coherence) between sustainability information and information in the annual or consolidated financial statements (financial information).
  • Harmonization of the reporting obligations under the CSRD with the reporting obligations under the EU Taxonomy Regulation.

Should you ever lose track of the big picture, my colleagues and I from the AGN EMEA Accounting, Auditing & Education Committee (AAEC) will be happy to help and guide you safely through the IFRS and CSR jungle. As a member of AGN International, you can use the AGN AAEC Helpline at any time or contact me by email at carsten.ernst@wirtschaftstreuhand.de or by mobile phone at +49 173 8710322.

 


Carsten Ernst
Managing Partner
Wirtschafts Treuhand Group
Stuttgart, Germany
– Expert in financial (IFRS) and sustainablility (ESRS and GRI) reporting

– Audit of financial and sustainability reports in accordance with ISAs

– Member of the following AGN bodies:
– EMEA Board of Directors (Chairman)
– EMEA AAEC Accounting, Auditing and Education Committee (Member)

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