EU CSRD: 'A reality check in the face of short-sighted deregulation calls'
Certain politicians in the European parliament and in Berlin and Paris are framing the standardisation of sustainability disclosures as useless bureaucracy and even a threat to economic competitiveness. These perspectives lack a clear analysis of the real issues at stake...
Some companies say they are overwhelmed by the new requirements... it is crucial to understand the root of these challenges...
[M]any companies are trying to over-comply with the CSRD partly because of a misinterpretation of the standards. Some large companies, for instance, demand excessive data from smaller entities in their value chains... the European Commission has clarified this point in its recent FAQ. Moreover, some ESG service providers offer models that contribute to this over-compliance, leading companies to focus on non-material aspects...
While initial implementation is a first-time investment, the recurring costs are expected to be significantly lower. In general, ESG-related costs remain a fraction of other administrative expenses.
It is important to highlight that not all companies are complaining about the CSRD. Many corporate voices emphasise the strategic use and value of the new sustainability reporting rules. A recent survey even indicates that 81 per cent of companies that are not subject to the CSRD still intend to comply...
The EU must resist the temptation to make U-turns on its legal framework. Companies need clarity and, if necessary, additional guidance and phased implementation to navigate the transition effectively... By embracing standardised sustainability disclosures, the EU can ensure a resilient and competitive economy, capable of leading the global sustainability transition.
See also: EU Corporate Sustainability Reporting Directive: SMEs’ role and coherence with sustainability due diligence, Frank Bold, October 2024