Sustainability performance reporting has existed in some form for decades, yet the rapid rise in environmental, social and governance (ESG) reporting frameworks and directives means that its history is occasionally forgotten. With the first disclosures against the Corporate Sustainability Reporting Directive getting ever closer, this blog takes a brief look at how the Directive has been shaped and at some of the key dates in its complex journey.
Even before the advent of what is regarded as the very first sustainability reporting framework, the Global Reporting Initiative (GRI) in 1997, some businesses and industry bodies have voluntarily reported on their environmental and social impact. Since the introduction of the GRI in 1997 there has been little let up in the development of new, voluntary and mandatory sustainability reporting frameworks such as the Dow Jones Sustainability Index (DJSI), Carbon Disclosure Project (CDP), Task Force on Climate-related Financial Disclosure (TCFD) and the Non-Financial Reporting Directive (NFRD).
These frameworks all had some part to play in shaping the CSRD and it’s the NFRD where the journey begins.
2014 – Aimed at enhancing transparency within sustainability reporting the European Commission proposes a directive that would require large EU companies to disclose non-financial information within their annual reports. It is subsequently approved by the European Parliament in the December of the same year.
2015 – The NFRD is approved by the European Union and is officially published in the Official Journal of the European Union (OJEU).
2017-2018 – The NFRD is transposed into national law by EU Member States. Companies affected by the directive begin reporting non-financial information covering environmental matters, social and employee matters, human rights, diversity, anti-bribery and corruption for financial year 2017.
2021 – The European Commission launches a consultation on the NFRD before votes in the European Parliament and European Council who approve proposals for a revised and expanded version of the NFRD, the Corporate Sustainability Reporting Directive.
2022 – The CSRD is officially published in the Official Journal of the European Union. EU Member States are given 18 months to transpose the Directive into national laws. In the same year, the European Financial Reporting Advisory Group (EFRAG) launched a public consultation on the draft European Sustainability Reporting Directives which affected businesses will be required to report against.
2023 – In January of 2023 the CSRD officially entered force. In July 2023, the first set of ESRS was adopted as a Delegated Act by the European Commission before final adoption in October of 2023.
The next step in the CSRD journey is disclosure against the ESRS Standards. By the time the first reports are published in 2025, it will have been over ten years since the NFRD was proposed and almost 30 years since the GRI was established. It’s fair to say that for many, sustainable business practices have been a consideration for far longer than a lot of people may realise.
To learn more about the CSRD including the implementation timeline, subject areas covered within the standards and examples of best practice read the Achilles Introduction to the Corporate Sustainability Reporting Directive.