Sustainability reporting regulation

This chapter outlines the main sustainability reporting regulations adopted globally, with a particular focus on the European Union framework. It begins by examining the costs and benefits associated with mandatory sustainability reporting, followed by an overview of key international regulations in this area. Special attention is given to the EU’s regulatory system, which is shaped by the Sustainable Finance Action Plan and the European Green Deal, and culminates in the Corporate Sustainability Reporting Directive (CSRD). The chapter also explores the Non-Financial Reporting Directive (NFRD), enacted in 2014 as the first EU mandate requiring non-financial disclosures, highlighting its key features and the main challenges faced during its implementation. The NFRD was subsequently replaced by the CSRD, adopted in 2022. A detailed analysis is provided of the companies subject to the CSRD, the timeline for its implementation, and the type and format of sustainability information required for disclosure. In addition, the chapter discusses the EU Taxonomy Regulation, introduced in 2020, which establishes a classification system for environmentally sustainable economic activities and applies to companies within the scope of the CSRD. The chapter concludes with a look at anticipated future developments in the EU sustainability reporting framework.