CSRD: consultation response to EU reporting standards

Last January, the Corporate Sustainability Reporting Directive (CSRD) took effect. The Directive requires all large companies to report their sustainability policies and performance every year based on the binding European Sustainability Reporting Standards (ESRS), starting in 2024/2025. The ESRS aims to provide clear, substantive and practical guidelines for companies to implement the CSRD in their operations.

After an update of these standards in November 2022, the European Commission published a revised version of the draft and launched an online consultation on 9 June 2023. In our legal advice on the CSRD and draft ESRS, we saw that clients were struggling with the Directive's purpose of identifying ESG risks and opportunities. A further clarification of the ESRS could help companies improve their annual reporting while reducing some of the pressure on SMEs.

Jacques Kröner and Yentl Coenradie address three general aspects of the ESRS draft in a consultation response. First of all, they advocate to clarify the ESRS's open standards to prevent legal uncertainty. Their response also proposes ways to expand and improve the exception for scope 3 emissions reporting. In addition, they ask to further explain 'dependencies on principal risks', which was included in the Accounting Directive based on the CSRD, and how to report on that subject.