EP Committee Approves Corporate Sustainability Reporting Directive

The European Parliament (EP) Legal Affairs Committee announced on March 15, 2022, that it voted 22-1 in favor of the Corporate Sustainability Reporting Directive. According to the Committee, if agreed with European Union (EU) governments, the bill would “make businesses more accountable for their impact on people and the planet, while giving investors and the public access to comparable, reliable and easily accessible information on sustainability.” The European Financial Reporting Advisory Group would be tasked with developing mandatory EU sustainability-reporting standards covering environmental matters, social affairs, including gender equality and diversity, and governance, including anti-corruption and bribery. The Committee agreed that the Directive should cover all large companies, as well as non-EU companies operating in the internal market. The European Commission (EC) would be asked to establish additional reporting criteria for companies with relevant activities in high-risk sectors (textile, agriculture, mining, and minerals). The Committee proposes to give companies an additional year to adapt to the new rules, with the first public reports due in 2025. Talks with EU member states can start once the EP as a whole approves its negotiating position. More information on the EC’s proposal is available in our March 8, 2022, blog item.