Sustainability Reporting: What to know about the new EU rules?
On 9th November 2022, Monika Krauthahn, Sustainability Catalyst in Hospitality and CEO of Krauthahn Consulting, hosted a Webinar on the upcoming EU Corporate Sustainability Reporting Directive (CSRD).
Pieter Lugtigheid, Senior Manager - EY Sustainability and Strategy led with an introduction on CSRD, followed by a 30 minute discussion and Q&A. Amongst the panelists were Andreas Koch, Managing Director – blueContec and Prof. Dr. Willy Legrand, Professor of Hospitality, Tourism and Business Management - IU International University of Applied Sciences Germany.
The EU Corporate Sustainability Reporting Directive (CSRD) will bring Sustainability Reporting on par with financial reporting. Amongst the key questions addressed in the webinar were: What does CSRD mean for the Hospitality and Tourism Industry? What are the consequences and necessary next steps? How will the industries SMEs, with approximately 99% of the +2 million tourism businesses in the EU and the backbone of the industry be affected?
Context
The EU is set to adopt the Corporate Sustainability Reporting Directive (CSRD) in October 2022, amending the previously applicable Non-Financial Reporting Directive (NFRD).*
The directive will apply to all companies listed on the EU regulated markets, except for listed micro companies. Listed small- and medium-sized enterprises (SMEs) have until 1 January 2026 to comply with the reporting requirements, even though there’s an “opt-out” clause until 2028.
It will apply to a “large undertaking” that is either an EU company or an EU subsidiary of a non-EU company. A “large undertaking” is a defined term in the Accounting Directive2 and means an entity that exceeds at least two of the following criteria:
- A net turnover of €40 million
- A balance sheet total of €20 million
- 250 employees on average over the financial year
Timescales: The 27 EU Member States are expected to transpose the new directive into national law 18 months after its entry into force. Companies that are already subject to the NFRD will need to comply with the amended rules for fiscal years beginning on or after 1 January 2024.
The Commission aims to adopt a first set of Sustainability Reporting Standards, by 30 June 2023.
(*) Source: “Sustainability reporting: what to know about the new EU rules?”, by EY, article published 01 August 2022
