BPFI views on proposed EU legislation to Corporate Reporting on Sustainability

BPFI welcomes the proposal for a Corporate Sustainability Reporting Directive (CSRD), a key part of the EU’s ambitious Sustainable Finance agenda to deliver on a key climate and environmental objective of the Paris Climate Agreement, making finance flows consistent with a pathway toward low greenhouse gas emissions and climate-resilient development.

The draft legislation significantly expands the scope of the Non-Financial Reporting Directive,  requiring entities with 250 employees (threshold is currently 500) to report.   Once enacted, the CSRD will really impact on a large number of corporates, not just banks but also their clients, because it makes reporting on sustainability mandatory and requires independent auditor verification.

The banking sector must implement significant complex legislation, including the Sustainable Finance Disclosures Regulation and the EU Taxonomy Regulation, so the CSRD’s requirement for coherent, standardised disclosures from non-financial corporates will go some ways to support banks and other financial market participants to properly assess the sustainability of their books and to drive capital allocation that helps deliver on their ESG requirements.

Standardising of corporate reporting on sustainability is key for BPFI members as they prioritise the integration of Environmental, Social and Governance (ESG) factors, seeking to both manage the impact of climate change on their business and to support their customers to make the transition away from carbon-intensive activities, as required by the EU’s Green New Deal and the government’s Climate Action Plan, (revised version due in Q3 2021).  

Please see the link to BPFI’s submission to the Dept of Enterprise Trade and Employment regarding EC’s proposed legislation seeking to make mandatory corporate reporting of sustainability.