The European Commission’s proposed changes would simplify Corporate Sustainability Reporting Directive (CSRD) reporting requirements, particularly for small and medium-size entities.
Significant changes proposed include the removal of around 80% of companies from the scope of CSRD, to focus reporting obligations on the largest companies, a news release said. The Commission also plans to postpone the reporting requirements for companies currently in the scope of CSRD until 2028.
Reducing reporting burdens for SMEs will help the EU focus its regulatory framework on the largest companies, which are likely to have a “bigger impact on the climate and the environment”, according to the Commission.
In a statement, the Global Reporting Initiative called the proposed changes to the CSRD a “backward step” that “undermines the level playing field needed to achieve sustainable growth”.
The legislative proposals will now be submitted to the European Parliament and the Council for their consideration and adoption.
According to the release, the proposals aim to achieve at least a 25% reduction in administrative burdens, and at least 35% for SMEs until the end of this current Commission mandate in 2029. They cover a number of related legislative fields, the release said, including sustainable finance reporting, sustainability due diligence, EU Taxonomy, carbon border adjustment mechanism, and European investment programmes.
The proposals, if adopted, would save companies around €6.3 billion in administrative costs and “mobilise additional public and private investment capacity” of €50 billion to support policy priorities.
FRC updates guidance for going concern reporting
Following a consultation, the UK Financial Reporting Council (FRC) updated its guidance on going concern reporting, including solvency and liquidity risks, a news release said. The updated guidance aims to help companies demonstrate the assessments underlying their going concern conclusions to improve investor and stakeholder confidence.
The non-mandatory guidance brings together the requirements of company law, accounting standards, auditing standards, listing rules, the UK Corporate Governance Code, and other relevant regulation into one convenient place for those preparing reports, the release said.
More clarity around how going concern conclusions are reached makes it easier for companies to access capital and support UK economic growth, the release said. The guidance serves as a “proportionate and practical guide” for companies of different sizes to prepare high-quality, company-specific disclosures.
GRI opens consultation on labour-related standards
As part of the Global Reporting Initiative’s (GRI’s) review into its labour-related standards, which encompass work/life balance, skills development, and support for employees with family and care responsibilities, the GRI opened a public consultation to gain input preceding its final set of disclosures.
The proposed updates emphasise greater transparency for “equal treatment and career development of workers” and address the measures companies have in place, a news release said.
The public comment period is open until 29 April, with feedback sought on two exposure drafts, including the revised version of GRI 404: Training and Education Topic Standard and a new standard for working parents and caregivers, the release said.
Comments can be submitted online.
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