In 2023, all companies listed on regulated markets in the European Union will begin applying the Corporate Sustainability Reporting Directive (CSRD), a new rule which will require them to publish, from 2024, detailed information about how they relate to the environment, the treatment of employees, human rights, anti-corruption, bribery, and boardroom diversity. It’s aimed at improving the functioning of a multi-trillion-dollar market known as ESG (environment, society, and governance), which has long been troubled by inconsistencies in data quality, reporting standards, and methods used to generate companies’ ESG ratings.
The new EU rule will try to tame the Wild West of ESG in three ways. First, companies must meet mandatory EU sustainability standards, which should introduce greater quality and consistency to their reporting. Second, companies’ reported information must be audited,…
