The Corporate Sustainability Reporting Directive expands the existing sustainability reporting requirements and brings more companies under its scope.
By Paul A. Davies, Michael D. Green, and James Bee
On 21 June 2022, the European Parliament and European Council reached a provisional political agreement on the terms of the EU’s proposed Corporate Sustainability Reporting Directive (CSRD). The CSRD will extend the current sustainability reporting requirements in the EU (namely those under the Non-Financial Reporting Directive (NFRD)), to include more companies and topics and to require more detailed disclosures, and represents a key piece of legislation in the international trend towards increasing sustainability-related reporting by companies. The European Parliament indicated this international aim in its press release announcing the agreement, stating that the CSRD “aims to end greenwashing and lay the groundwork for sustainability reporting standards at global level.”
While the full text of the agreed version of the CSRD has not yet been made public, the press releases from the European Parliament and Council do shine some light on the key provisions that will likely be included in the final document.
On 3 November 2021, the International Financial Reporting Standards (IFRS) Foundation Trustees Chair, Erkki Liikanen, announced the long-awaited formation of the International Sustainability Standards Board (ISSB). The ISSB aims to address to one of the key issues that companies and investors have faced in relation to environmental, social, and governance (ESG)-related corporate reporting over recent years — the wide variety of different reporting frameworks and a lack of an authoritative market leader.
On August 26, 2021, the Singapore Exchange Regulation (SGX RegCo) released a consultation paper proposing amendments to the sustainability reporting (SR) regime of the Singapore Exchange (SGX). The proposed changes would require Singapore-listed issuers to move toward including in their sustainability reports climate-related disclosures that are consistent with the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD Recommendations).
Richard Monks, Director of Strategy at the UK Financial Conduct Authority (FCA), recently delivered a speech on the environmental, social, and governance (ESG) reporting regime and how it can be improved as part of SRI Services and Partners’ Good Money Week, held in October. The speech draws particular attention to the increasing use and relevance of ESG ratings.
On 25 November 2020, the Sustainability Accounting Standards Board (SASB) and the International Integrated Reporting Council (IIRC) announced that they are merging into a unified organisation, the Value Reporting Foundation. This move reflects an effort to provide investors and corporates “with a comprehensive corporate reporting framework across the full range of enterprise value drivers and standards” and recognises “the need for data-driven information”.
The Agence Française de Développement (AFD) has issued a new Sustainable Development Bond Framework (the Framework) that establishes bond eligibility criteria based on fundamental principles, and describes the identification and selection process for parties to be included in any Sustainable Development Goals (SDG) bonds. The Framework defines SDG bonds as “loans extended to countries, territorial authorities, NGOs, banks and financial intermediaries, or public and private enterprises” which satisfy the eligibility criteria discussed below. The AFD is a public financial institution working to fight poverty, promote sustainable development, and implement policy defined by the French government.
As 2020 draws to a close, it is clear that standard-setters have made significant progress in harmonising environmental, social, and governance (ESG) disclosure frameworks. The launch of new initiatives in recent months shows that stakeholders recognise both the value of streamlining ESG disclosures and the importance of consolidating such disclosures as soon as possible. Organisations are also keenly monitoring developments. For example, the Basel Committee on Banking Supervision is actively tracking the initiatives outlined below in an effort to leverage its work and facilitate information-sharing across parallel initiatives.
On 19 August 2020, the CFA Institute — the largest organisation representing investment professionals — released a consultation concerning ESG disclosures (the Consultation). Recognising the significant growth in ESG financial products, the CFA Institute is looking to establish a standard in describing and understanding the ESG financial products on the market. In doing so, the CFA Institute joins several organisations, including the Global Investors for Sustainable Development Alliance (previously covered in this 
On 5 August 2020, Global Investors for Sustainable Development (GISD) Alliance released to the European Commission their