The Nickel Report

A set of mandatory environmental, social, and governance (ESG) reporting standards, the European Sustainability Reporting Standards (ESRS), are set to enter into force in the European Union (EU) at the end of this year.  These standards were adopted by the European Commission, the EU’s executive branch, on July 31, 2023 and, barring rejection by the European Parliament or the European Council, will be implemented as part of the EU’s Corporate Sustainability Reporting Directive (CSRD) – a fundamental pillar of the broad “EU Green Deal” – which requires mandatory ESG reporting for certain companies that do business in the EU.  This summary provides an overview of who is subject to the CSRD and when, summarizes key information covered under this initial set of standards, highlights technical guidance from the entity that created the standards, and discusses planned future development of additional standards.

We have written extensively on the US Securities and Exchange Commission (SEC) proposal to require that public companies disclose climate-related information and other environment, social, and corporate governance (ESG) trends. However, the European Union (EU) is at the vanguard of emerging requirements focused on climate-related information and broader ESG-aligned information.

Yesterday, the European Commission (the Commission) – the executive branch of the European Union (EU) – adopted a package of proposals to deliver on the EU’s ambitious target of reducing greenhouse gas (GHG) emissions by at least 55% by 2030. These proposals – collectively known as “Fit for 55” – are only part of the suite of legislative tools, legal obligations, and policies to be rolled out under the European Green Deal, a broad non-binding action plan intended to make the EU’s economy more sustainable and help Europe become the world’s first climate-neutral continent by 2050. The comprehensive package of twelve policies proposed yesterday contains the following key initiatives:

Environmental, social and corporate governance (ESG) – like climate change and environmental justice – has been a hot topic of discussion in the early days of the Biden administration. Illustrating the interconnectedness of the trending issues, climate change and environmental justice are pillars of ESG.