A coalition has warned against delays to Europe’s proposed Corporate Sustainability Reporting Directive.
Asset manager Schroders joined ShareAction, the UN-convened Principles for Responsible Investment (PRI), World Benchmarking Alliance and others in supporting continued momentum for the directive.
They say the reform would enter into effect next year, with companies having to start collecting data from January 1st on indicators including greenhouse gas emissions and energy use.
The directive is designed to help the EU switch capital flows toward a more sustainable economy and to avoid greenwashing.
It will allow investors to consider Environmental, Social, and Governance (ESG) factors in their investment decisions and help civil society assess companies’ impacts.
The signatories said new mandatory reporting will reduce costs to business in the medium to long term by reducing the number of requests for sustainability information they receive.
“Double materiality shows EU leaders consider impact globally”
“Implementing the EU standards is instrumental to help companies provide relevant information that is needed by… investors, financial market participants and civil society… and in line with commitments on climate, environment and human rights,” the letter says.
It urges the EU to reach agreement promptly “in order to support swift implementation.”
The letter says the proposed directive provides certainty to companies, as well as to investors.
“Any delay will have a negative impact on the ability of companies and financial market participants to support the sustainability transition of our economy.
“Moreover, it will put at risk the EU Green Deal and hinder the implementation of the Renewed Sustainable Finance Strategy,” it says.
There has been some resistance to the double materiality proposed, which means businesses will start to report on how they impact society and the environment. This is in addition to reporting on how sustainability issues might affect their company’s fortunes.
The letter calls for maintaining the double materiality concept, for reasons including “demonstrating EU leadership to promote the consideration of impact globally.”
