ESG regulations and standards: what are they and what benefits can they bring?
Posted: Sun Dec 22, 2024 4:35 am
The European Union has introduced regulations to include non-financial factors in company reports.
The CSR Directive extends ESG reporting obligations to around 50,000 EU companies and requires more detailed reporting of non-financial results compared to the previous NFRD.
The CSRS Directive will be implemented progressively from 2025 to 2029.
The European Sustainability Reporting phone code philippines Standards (ERSR) harmonize standards for ESG reporting.
Sectoral rules and simplified rules for SMEs are expected to be published in the near future.
By implementing the new ESG rules, companies can expect to gain an edge over their competitors when bidding or raising capital. Taking ESG categories into account will enable companies to make better strategic decisions.
More details below.
Differences between regulations and standards
Although the ESG acronym has been around since 2004 and is part of the 2015 UN initiative Agenda 2030 and although by definition it touches on aspects such as environmental impact, social issues and corporate governance standards, the lack of global ESG standards has been a huge obstacle to ESG having real business value.
The European Union, observing this problem, decided to establish appropriate regulations for economic operators regarding ESG information. The rules aim to extend financial statements to include non-financial factors, i.e. to extend companies' responsibilities to include sustainability, social and corporate responsibility issues. The rules, in turn, address the way in which ESG should be included in reports.
The CSR Directive extends ESG reporting obligations to around 50,000 EU companies and requires more detailed reporting of non-financial results compared to the previous NFRD.
The CSRS Directive will be implemented progressively from 2025 to 2029.
The European Sustainability Reporting phone code philippines Standards (ERSR) harmonize standards for ESG reporting.
Sectoral rules and simplified rules for SMEs are expected to be published in the near future.
By implementing the new ESG rules, companies can expect to gain an edge over their competitors when bidding or raising capital. Taking ESG categories into account will enable companies to make better strategic decisions.
More details below.
Differences between regulations and standards
Although the ESG acronym has been around since 2004 and is part of the 2015 UN initiative Agenda 2030 and although by definition it touches on aspects such as environmental impact, social issues and corporate governance standards, the lack of global ESG standards has been a huge obstacle to ESG having real business value.
The European Union, observing this problem, decided to establish appropriate regulations for economic operators regarding ESG information. The rules aim to extend financial statements to include non-financial factors, i.e. to extend companies' responsibilities to include sustainability, social and corporate responsibility issues. The rules, in turn, address the way in which ESG should be included in reports.