2 minute read 4 May 2021
What new the EU’s April package and the proposed Corporate Sustainability Reporting Directive bring to us?

What new the EU’s April package and the proposed Corporate Sustainability Reporting Directive bring to us?

By Jani Alenius

EY Finland, Climate Change and Sustainability Services, Lead

Helping clients in the fast-paced sustainability field with current topics related to sustainability and climate change and how these topics influence business and financial disclosures.

2 minute read 4 May 2021

The EU’s so-called April 2021 package is a major contribution to the effort of extending the European Growth strategy, the Green Deal, widely across all sectors and existing regulation. The new Corporate Sustainability Reporting Directive aims to align sustainability reporting  with financial reporting and extends reporting requirements to even more companies.

The EU’s April package introduces new tools for implementing the Green Deal and directing financial flows towards sustainable economic activity. The April package consists of three parts:

  1. EU Taxonomy Climate Delegated Act, which further classifies which economic activity can be seen to align with definitions of climate change adaptation and mitigation.
  2. Corporate Sustainability Reporting Directive, which proposes several methods to increase consistency of non-financial reporting and for the first time proposes mandatory assurance of the non-financial data.
  3. Six amending delegated acts, which add sustainability-related articles in existing regulation concerning especially financial firms and insurance providers. For example, a financial advisor will have to obtain information on the client’s sustainability preference in addition to traditional risk assessment.

Corporate Sustainability Reporting Directive extends reporting requirements to even more companies

The proposal on Corporate Sustainability Reporting Directive, which would amend the previous non-financial reporting directive, addresses the widely recognized challenge related to varied sustainability reporting practices and the quality of data reported. Also, it extends reporting requirements to even more companies.

Without delays, the new proposed reporting obligations could start to apply from 2024 (for the financial year 2023). In the long term, Corporate Sustainability Reporting Directive aims to align sustainability reporting with financial reporting.

 

Summary

The EU's so-called April 2021 package introduced simultaneously several changes and proposals, which aim to redirect financial flows towards sustainable economic activity. The first changes can concern companies as soon as 2022 (for financial year 2021).

About this article

By Jani Alenius

EY Finland, Climate Change and Sustainability Services, Lead

Helping clients in the fast-paced sustainability field with current topics related to sustainability and climate change and how these topics influence business and financial disclosures.