2021/0104(COD) Corporate Sustainability Reporting Directive
Next event: Indicative plenary sitting date 2022/11/09

Progress: Awaiting Parliament's position in 1st reading

Lead JURI DURAND Pascal (icon: Renew Renew) BUDA Daniel (icon: EPP EPP), WOLTERS Lara (icon: S&D S&D), TOUSSAINT Marie (icon: Verts/ALE Verts/ALE), LEBRETON Gilles (icon: ID ID), STANCANELLI Raffaele (icon: ECR ECR), AUBRY Manon (icon: GUE/NGL GUE/NGL)
Committee Opinion FEMM BIEDROŃ Robert (icon: S&D S&D)
Committee Opinion DEVE MAJORINO Pierfrancesco (icon: S&D S&D)
Committee Opinion AFET KARLSBRO Karin (icon: Renew Renew) Heidi HAUTALA (icon: Verts/ALE Verts/ALE), Karol KARSKI (icon: ECR ECR), Ivan ŠTEFANEC (icon: PPE PPE), Isabel SANTOS (icon: S&D S&D)
Committee Opinion ECON POLFJÄRD Jessica (icon: EPP EPP) Bas EICKHOUT (icon: Verts/ALE Verts/ALE), Manon AUBRY (icon: GUE/NGL GUE/NGL), Gunnar BECK (icon: ID ID), Dragoş PÎSLARU (icon: RE RE), Gabriele BISCHOFF (icon: S&D S&D), Michiel HOOGEVEEN (icon: ECR ECR)
Committee Opinion EMPL PETER-HANSEN Kira Marie (icon: Verts/ALE Verts/ALE) Evelyn REGNER (icon: S&D S&D), Özlem DEMIREL (icon: GUE/NGL GUE/NGL), Sylvie BRUNET (icon: RE RE), Radan KANEV (icon: PPE PPE), Guido REIL (icon: ID ID), Margarita DE LA PISA CARRIÓN (icon: ECR ECR)
Committee Opinion ITRE BUŞOI Cristian-Silviu (icon: EPP EPP)
Committee Opinion ENVI PEREIRA Lídia (icon: EPP EPP) Maria ARENA (icon: S&D S&D), Pascal CANFIN (icon: RE RE), Silvia MODIG (icon: GUE/NGL GUE/NGL), Marie TOUSSAINT (icon: Verts/ALE Verts/ALE), Rob ROOKEN (icon: ECR ECR)
Lead committee dossier:
Legal Basis:
RoP 57, TFEU 050, TFEU 114


   Indicative plenary sitting date
   EP - Approval in committee of the text agreed at 1st reading interinstitutional negotiations
   EP - Committee decision to enter into interinstitutional negotiations confirmed by plenary (Rule 71)
   EP - Committee decision to enter into interinstitutional negotiations announced in plenary (Rule 71)
   EP - Committee report tabled for plenary, 1st reading

The Committee on Legal Affairs adopted the report by Pascal DURAND (Renew Europe, FR) on the proposal for a Directive of the European Parliament and of the Council amending Directive 2013/34/EU, Directive 2004/109/EC, Directive 2006/43/EC and Regulation (EU) No 537/2014, as regards corporate sustainability reporting.

The proposal for a corporate sustainability reporting Directive (CSRD) aims to improve the flow of sustainability information in the corporate world. Investors need to know about the impact that companies have on people and the environment to meet their own disclosure requirements and be better informed on sustainability risks.

The committee responsible recommended that the European Parliament's position adopted at first reading under the ordinary legislative procedure should amend the proposal as follows:


Given that a guaranteed level playing field and equal treatment for undertakings operating in Europe should be a guiding principle of this revision, the new CSRD rules should cover:

- all large companies, including undertakings organised as foundations, trusts or franchises;

- non-EU companies operating in the internal market;

- small and medium-sized undertakings whose transferable securities are admitted to trading on a trading venue of any Member State;

- small and medium sized undertakings carrying out high-risk economic activities.

SMEs not carrying out high-risk economic activities and non-listed SMEs can also choose to use these proportionate standards on a voluntary basis.

High-risk sectors

Certain business activities operating in ‘risky’ sectors are already subject to enhanced transparency requirements (e.g. conflict minerals) or even bans on access to the European market (e.g. timber from illegal forestry) on account of the significant and repeated impact of these activities on human rights, the environment and good governance. However, the effective implementation of these sectoral policies is hampered by a lack of access to information and unreliable information.

The text also asks the Commission to establish additional reporting criteria for companies with relevant activities in high-risk sectors. The Commission should be empowered to adopt delegated acts to establish and amend a list of activities that include economic activities in the following high-risk sectors:

- garment and footwear, including manufacturing of textile;

- agriculture, including manufacturing of food and beverage,

- extractive sector (mining, oil and gas industries);

- minerals, including tin, tantalum, tungsten and gold, as well as all other mineral resources.

EU sustainability standards

The information which undertakings currently provide about their policies is not always clear and consistent. There are many internationally developed ‘measurable, science-based indicators’ which can improve the quality of these reports. The report proposes further developing the definitions of the provisions on these measurable indicators while leaving it to the Commission, subject to supervision by the co-legislators, to reach a precise definition as to what needs to be reported.

The text clarifies reporting rules for companies by introducing more detailed reporting requirements into the revamped Non-Financial Reporting Directive, in accordance with the European Green Deal. Disclosed information should be audited, more easily accessible, reliable and comparable, according to Members.

The European Financial Reporting Advisory Group (EFRAG) would be tasked with developing the mandatory EU sustainability-reporting standards, covering environmental matters, social affairs, including gender equality and diversity, and governance, including anti-corruption and bribery, which the Commission would then adopt by delegated acts. To achieve this, Members propose that EFRAG’s funding should be increased to at least 75% and annual discussions held with Parliament.

Evaluation mechanism

According to the amended text, the sustainability reporting standards should include an evaluation mechanism, based on qualitative information and indicators, which makes the disclosed sustainability information comparable between companies and allows for the quantitative rating of corporate sustainability performance as a basis for public procurement, State aid and other policy measures.

   EP - Committee opinion
   EP - Vote in committee, 1st reading
   EP - Committee decision to open interinstitutional negotiations with report adopted in committee
   EP - Committee opinion
   EP - Committee opinion
   EP - Specific opinion
   EP - Committee opinion
   EP - Committee opinion
   EP - Committee opinion
   EP - Referral to associated committees announced in Parliament
   EP - Amendments tabled in committee
   EP - Amendments tabled in committee
   EP - Committee draft report
   EP - KARLSBRO Karin (Renew) appointed as rapporteur in AFET
   DE_BUNDESRAT - Contribution
   EP - PETER-HANSEN Kira Marie (Verts/ALE) appointed as rapporteur in EMPL
   EP - BUŞOI Cristian-Silviu (EPP) appointed as rapporteur in ITRE
   EP - PEREIRA Lídia (EPP) appointed as rapporteur in ENVI
   ECB - European Central Bank: opinion, guideline, report
   EP - POLFJÄRD Jessica (EPP) appointed as rapporteur in ECON
   EP - Committee referral announced in Parliament, 1st reading
   EP - MAJORINO Pierfrancesco (S&D) appointed as rapporteur in DEVE
   EP - BIEDROŃ Robert (S&D) appointed as rapporteur in FEMM
   EP - DURAND Pascal (Renew) appointed as rapporteur in JURI
   EC - Document attached to the procedure
   EC - Document attached to the procedure
   EC - Document attached to the procedure
   EC - Legislative proposal published

PURPOSE: to create a new corporate sustainability reporting Directive to improve the flow of sustainability information in the corporate world.

PROPOSED ACT: Directive of the European Parliament and of the Council.

ROLE OF THE EUROPEAN PARLIAMENT: the European Parliament decides in accordance with the ordinary legislative procedure and on an equal footing with the Council.

BACKGROUND: the Non-Financial Reporting Directive (Directive 2014/95/EU, the NFRD), amending the Accounting Directive, was adopted in 2014. It applies to large public-interest entities with an average number of employees in excess of 500, and to public-interest entities that are parent companies of a large group with an average number of employees in excess of 500 on a consolidated basis. More than 11 000 companies are subject to the reporting requirements of the NFRD. The NFRD introduced a requirement for companies to report both on how sustainability issues affect their performance, position and development (the ‘outside-in’ perspective), and on their impact on people and the environment (the ‘inside-out’ perspective). This is often known as ‘double materiality’.

CONTENT: the Commission puts forward this proposal for a corporate sustainability reporting Directive (CSRD) with a view to revising and strengthening the existing rules introduced by the Non-Financial Reporting Directive (NFRD) on sustainability reporting. It aims to improve the flow of sustainability information in the corporate world. It will make sustainability reporting by companies more consistent, so that financial firms, investors and the broader public can use comparable and reliable sustainability information.

The Commission estimates that the proposed option would result in around 49 000 companies reporting sustainability information compared to 11 600 under the current regime.

Compared to the NFRD sustainability reporting requirements, the principal novelties of this proposal are:

- to extend the scope of these requirements to include all large companies, whether they are listed or not and without the previous 500-employee threshold. This change would mean that all large companies are publicly accountable for their impact on people and the environment. It also responds to demands from investors for sustainability information from such companies;

- to extend the scope to include listed SMEs, with the exception of listed micro-enterprises. For reasons of investor protection, it is especially important that investors have access to adequate sustainability information from listed companies. Furthermore, if listed SMEs do not report sustainability information, they may find themselves at risk of exclusion from investment portfolios. This risk will grow as sustainability information becomes ever more important throughout the financial system;

- to help reduce systemic risks to the economy and improve the allocation of financial capital to companies and activities that address social, health and environmental problems;

- to make companies more accountable for their impacts on people and the environment, thereby building trust between them and society;

- to simplify the reporting process for companies;

- to reduce unnecessary costs of sustainability reporting for companies, and to enable them to meet the growing demand for sustainability information in an efficient manner. It will bring clarity and certainty on what sustainability information to report and make it easier for preparers to get the information they need for reporting purposes from their own business partners (suppliers, clients and investee companies). It should also reduce the number of demands companies receive for sustainability information in addition to the information they publish in their annual reports;

- to ensure that all information is published as part of companies’ management reports, and disclosed in a digital, machine-readable format.

The European Financial Reporting Advisory Group (EFRAG) will be responsible for developing draft EU standards on sustainability reporting, drawing on stakeholder expertise. The proposed EU standards would build on and contribute to international standard setting initiatives.


1603 2021/0104(COD)
2021/12/10 EMPL 207 amendments...
source: 702.955
2021/12/13 ENVI 316 amendments...
source: 702.994
2021/12/15 JURI 563 amendments...