09 November 2022

Opening remarks by Commissioner McGuinness at the European Parliament plenary debate on the Corporate Sustainability Reporting Directive

This debate on the Corporate Sustainability Reporting Directive in my view represents a very important achievement in our collective efforts towards a more sustainable economy and society.

And I'm trying to catch the eye of our very committed rapporteur, and to say at the very outset, thank you for your passion this evening and your commitment during the process.

It is as a result of that and your collaboration with the shadow rapporteurs that we are able to have this debate and a sign-off on this important piece of legislation.

I think we are all reminded of the challenges we face, particularly this week as COP 27 takes place in Egypt.

There is so much to do around climate and biodiversity.

And we need both finance and information to be successful and to change the scenarios which are so alarming.

And it is a huge challenge.

This debate on the Corporate Sustainability Reporting Directive in my view represents a very important achievement in our collective efforts towards a more sustainable economy and society.

It will support and steer companies as they make the transition to more sustainable business models and a more sustainable economy.

The Directive will strengthen the rules on the environmental and the social information that companies have to report.

For the first time – and this is how significant this debate and this Directive is – we are putting sustainability reporting on an equal footing with financial reporting.

And this is hugely significant, as other speakers have already alluded to.

We need accurate and reliable information to ensure that investments are being made towards a more sustainable future.

Companies need the information to plan their transition paths.

And investors need the information to have clarity about what they're investing in and to combat greenwashing.

Because greenwashing if left unaddressed could reduce investor confidence in sustainable investment products – not to mention public confidence in sustainable finance and in companies' efforts to transition. 

Clear and consistent disclosure requirements, together with the new assurance requirement, will improve the reliability of sustainability information.

The final text of the Directive provides a good basis for alignment with the proposed Corporate Sustainability Due Diligence Directive, which is currently in trilogues.

The text also addresses the particular situation of SMEs.

Only listed SMEs are subject to reporting requirements.

And there are provisions to prevent SMEs in supply chains from being unduly burdened by “trickle-down” information requests from larger companies. 

The European Financial Reporting Advisory Group – EFRAG – is now in the process of improving its draft standards, so that they are in line with the Directive and implementable by companies.

European standards need to strike a balance between providing useful information for investors and stakeholders, and the potential cost and burden for reporting companies.

The Commission is fully committed to ensuring that this balance is achieved, considering the current economic situation.

EU standards must take account of global standards, including the standards currently being developed by the International Sustainability Standards Board, the ISSB.

Technical discussions between the Commission, EFRAG and the ISSB are taking place to achieve as much commonality as possible between European and global standards.

So I now look forward to rest of this debate on this really groundbreaking piece of legislation that we must insist is implemented fully and meets the needs of companies, investors and citizens.

European Commission

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