The European Securities and Markets Authority (ESMA) has released its 2024 European Common Enforcement Priorities (ECEP) Statement, outlining stringent new standards for corporate reporting under the Corporate Sustainability Reporting Directive (CSRD). This directive will now require over 50,000 companies to expand their disclosures on environmental, social, and governance (ESG) impacts.
Key priorities for the upcoming reporting cycle include:
Double Materiality Assessments: Companies are required to evaluate and report on both the effects of sustainability issues on business operations and their broader impact on society and the environment.
Alignment of Financial and Sustainability Reporting: Financial and ESG reports must be integrated to consistently address risks and opportunities throughout the value chain.
EU Taxonomy Compliance: ESMA emphasizes strict adherence to EU taxonomy templates to enhance transparency and comparability in sustainable economic activities.
ESMA has signaled a firm commitment to enforcement, indicating it will take action to ensure compliance where necessary. Experts suggest that ESMA’s assertive approach points to a potentially heightened level of scrutiny in sustainability reporting compared to recent guidance from the European Commission.
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