EU law requires certain large companies to disclose information on the way they operate and manage social and environmental challenges.

This helps investors, civil society organisations, consumers, policy makers and other stakeholders to evaluate the non-financial performance of large companies and encourages these companies to develop a responsible approach to business.

Directive 2014/95/EU – also called the Non-Financial Reporting Directive (NFRD) – lays down the rules on disclosure of non-financial and diversity information by certain large companies. This directive amends the Accounting Directive 2013/34/EU

Proposal for a Corporate Sustainability Reporting Directive (CSRD)

On 21 April 2021, the Commission adopted a proposal for a Corporate Sustainability Reporting Directive (CSRD), which would amend the existing reporting requirements of the NFRD. The proposal

  • extends the scope to all large companies and all companies listed on regulated markets (except listed micro-enterprises)
  • requires the audit (assurance) of reported information
  • introduces more detailed reporting requirements, and a requirement to report according to mandatory EU sustainability reporting standards
  • requires companies to digitally ‘tag’ the reported information, so it is machine readable and feeds into the European single access point envisaged in the capital markets union action plan

EU sustainability reporting standards

The Commission’s proposal for a Corporate Sustainability Reporting Directive (CSRD) envisages the adoption of EU sustainability reporting standards. The draft standards would be developed by the European Financial Reporting Advisory Group (EFRAG).

The standards will be tailored to EU policies, while building on and contributing to international standardisation initiatives.

The first set of standards would be adopted by October 2022.

Related links

Sustainable finance

Frequently asked questions on the CSRD proposal

Study on the Non-Financial Reporting Directive

Report on the review clauses in Directives 2013/34/EU, 2014/95/EU, and 2013/50/EU

Staff working document accompanying the report on the review clauses in Directives 2013/34/EU, 2014/95/EU, and 2013/50/EU

EFRAG reports on development of EU sustainability reporting standards

Commission guidelines on reporting climate-related information