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Consumers increasingly care about the impact of their investments on the world.
However, consumers investing into specific companies also often lack sufficient
information about their sustainability impact. Investors and financial services providers
offering such products often struggle to access comparable and reliable sustainability
information of the companies in which they invest. Mandatory sustainability reporting
standards would give consumers more clarity about the sustainability of their
investments, and help to support the transition towards a more resilient, low-carbon
economy.
BEUC strongly welcomes the proposal for a Corporate Sustainability Reporting Directive
(CSRD). It features several improvements civil society representatives have been calling
for and by and large reflects the recommendations issued by the European Financial
Reporting Advisory Group (EFRAG), earlier this year.
Despite the improvements, a few gaps in the reporting regime have not been sufficiently
addressed in the proposal. To close these gaps and truly make progress towards
transparent sustainable finance markets, the following measures are necessary:
1. All listed companies and all companies in high-impact sectors, including non-EU
companies whose securities are admitted to trading in the EU must be included in
the scope of sustainability reporting.
2. Businesses create different sustainability risks according to their activities. Mining,
for example may have very different consequences than producing textiles. The
non-financial statement must be tailored to the business risk. This applies to the
potential harm caused through the activity and the risk incurred due to changing
environmental factors like floods, for example. This means that the reporting must
be specific to the risk profile of a company, to be relevant to (retail-) investors.
3. The CSRD includes a mandate to create European mandatory sustainability
reporting standards. When these are being developed, they should cover all aspects
of sustainability reporting mandated by the level 1 text. In particular, this needs to
include reporting standards for the 1.5 °C objective.