EU law requires all large companies and medium-sized companies (except listed micro-enterprises) to disclose what they see as the risks and opportunities arising from social and environmental issues and the impact of their activities on people and the environment.
The EU recognizes that companies' transparency and reporting on environmental, social, human rights, and similar issues are key to sustainable development.
This helps investors, civil society organizations, consumers, and other stakeholders to evaluate the sustainability performance of companies, as part of the European Green Deal.
The European Green Deal is the EU’s sustainable development strategy for the 21st century. The central issue addressed by this strategy is the environment and climate change – how to develop the EU economy without accelerating climate change. The European Commission defines this strategy as ‘’a new growth strategy with the aim of transforming the EU into a fair and wealthy society, with a modern and competitive economy that uses resources efficiently, with net zero greenhouse gas emissions by 2050, and economic growth which is separated from resources exploitation”.
The Corporate Sustainability Reporting Directive (CSRD) entered into force on the 5th of January 2023. This new EU legislation aims to accentuate the growing awareness of environmental, social, and governance factors (ESG factors). One means is moving the publication of information related to firms’ social and environmental responsibility from virtually voluntary to mandatory.
The auditing and reporting processes have been specified in the CSRD and now include the possibility of recognizing accredited Conformity Assessment Bodies (CABs) as independent assurance services providers.
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