24th February 2022
Minister for Trade Promotion, Digital and Company Regulation Robert Troy TD joined his fellow Ministers with responsibility for the Internal Market and Industry at today’s meeting of the EU Competitiveness Council in Brussels where they agreed enhanced measures for non-financial reporting by companies on environmental, social, human rights and governance matters.
Welcoming progress on the Directive, Minister Troy acknowledged the imperative for more robust non-financial reporting to drive the urgent need for action on climate change. He said,
“there is an onus on us to require sustainability reporting in a clear way that gives maximum relevant information to investors, consumer and other stakeholders while avoiding unnecessary burdens on companies.”
Minister Troy thanked the Commission for its ambition in bringing forward legislation in this area and acknowledged the work done during the current and past Presidencies. He said,
“Ireland has fully supported this proposal which strikes the right balance by initially including the largest companies before being expanded to listed SMEs. While this is a positive step to more enhanced corporate sustainability reporting I believe we should be as ambitious as possible on timelines and stay open to bringing forward the timeframes for implementation as we move into Trilogues with the European Parliament.”
Next steps in the process will see Council enter discussions with the European Parliament on the proposal.
During the Council meeting, Ministers also discussed the impact of foreign subsidies on the internal market and the industrial mobility ecosystem in the context of the green transition. The French Presidency also updated Ministers on plans for a universal charger for mobile phones, tablets, cameras, portable wireless speakers, and wireless headphones, which will see devices being made available with or without a charger. Consumers will be provided with information to know what type of charger they would need to charge the device.
NOTES TO EDITOR
Directive amending Directives 2013/34/EU, 2004/109/EC and 2006/43/EC and Regulation (EU) No 537/2014 as regards the disclosure of sustainability information by undertakings
The Presidency presented a General Approach on the Corporate Sustainability Reporting Directive (CSRD) proposal on foot of the Council Working Party negotiations. The proposed Directive will revise existing EU rules on non-financial reporting. It was published in April 2021 and working party meetings commenced in June under the Portuguese Presidency, with negotiations in earnest subsequently taking place under the Slovenian Presidency.
Ireland has consistently maintained a positive and supportive position on the proposal since its publication. It is welcomed that the EU is taking action on sustainability reporting given the scale of the climate challenge, the interconnectedness of economies and global nature of enterprise.
The main elements of the proposal for a new Corporate Sustainability Reporting Directive to revise the existing rules on non-financial reporting by companies :
- Comprises environmental, social, human rights and governance matters;
- Extends the scope to all large companies and public interest entities (banks, insurance undertakings and listed companies i.e. those with at least 250 employees (not just those with over 500 employees as currently) and listed SMEs (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 under development by the European Financial Reporting Advisory Group (EFRAG) with simplified standards for SMEs; and
- Requires companies to digitally ‘tag’ the reported information, so it is machine readable and feeds into the European Single Access Point (ESAP) envisaged in the capital markets union action plan.
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