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With the Corporate Sustainability Due Diligence Directive, the European Commission (EC) aims to drive behavioural change in businesses and hold them accountable. The CSDDD introduces mandatory due diligence obligations for EU and non-EU large companies, and establishes liability in case of non-compliance. Small and medium-sized businesses (SMEs) will also be affected as they are part of the value chains.
The accountancy profession will play a key role in supporting companies enforce the new law, including SMEs. Our factsheet provides an overview of the main provisions of the CSDDD to support the profession in this regard.
The Committee of European Audit Oversight Bodies (CEAOB) issued guidelines for limited assurance engagements on sustainability reporting. The objective is to facilitate the harmonisation of the sustainability assurance across the EU.
The proposed guidelines are non-binding and do not override national pronouncements that are in force in EU Member States. However, national competent authorities may recommend or require the use of the guidelines.
This will be a key topic of discussion in our upcoming webinar, ‘Shaping the future of sustainability assurance engagements,’ on 12th November. Register now and find out more on our website.
On 17th September, EC President Ursula Von der Leyen (VDL) revealed the names and portfolio allocations for her new College of Commissioners. The full list of nominees and their detailed ‘mission letters’ – outlining VDL’s expectations can be found here.
VDL’s mission letters outlines several overarching priorities, including the commitment to meet EU Green Deal objectives and targets – indicating that sustainability remains high on her agenda. She also calls on all nominees to contribute to reducing reporting requirements by 25%, and by 35% for SMEs, and to hold bi-annual “implementation dialogues” with affected stakeholders.
Key appointments include:
The next step is the European Parliament’s approval process, expected to run from October to early November. Each nominee will be interviewed by the EP Committees. At the end, the EP will vote to approve (or reject) the new College of Commissioners as a whole. It is possible that during this process, some of the above names will be dropped and replaced by new ones, or the portfolio allocations may change.
On 9th September, Mario Draghi, former Italian Prime Minister and President of the European Central Bank (ECB), published his report proposing ways to boost the EU’s competitiveness. While the recommendations are not legally binding, they are expected to shape major policy changes in the upcoming EU term.
The report calls for up to EUR 800 billion in annual investments across key sectors such as green energy, sustainable transition, defense industry, technology, and productivity improvements. This funding should come from both public and private sectors, including common EU debt issuance. Draghi also emphasises the need for reducing administrative burdens and simplifying legislation to foster growth.
A major focus of the report is on unifying the EU single market, which Draghi argues is currently too fragmented, restricting capital flows and hindering innovation.
The XBRL taxonomy for ESRS Set 1 represents the digital transposition of the human-readable ESRS Set 1 and will be the basis for the European Securities and Market Authority (ESMA) to develop Regulatory Technical Standards (RTS) for marking up the sustainability statements prepared in accordance with ESRS.
Under the Corporate Sustainability Reporting Directive (CSRD), sustainability assurance providers are required to give an opinion on compliance with the mark-up requirement. However, this will only come into effect once the formal process for the RTS is completed, meaning the XBRL taxonomy must first be officially approved by EU policymakers.
The work programme was published on 1st October and gives an overview of the European Securities and Market Authorities’ (ESMA) planned activities for the upcoming year. ESMA plans to share its views on International Standards on Auditing (ISA), International Sustainability Standards on Auditing (ISSA) and will provide securities regulators’ perspective on audit matters at the Committee of European Audit Oversight Bodies (CEAOB).
As Chair of the CEAOB Subgroup on International Equivalence and Adequacy, ESMA will coordinate the work on performing new and monitoring previous equivalence and adequacy technical assessments of third-country audit legal frameworks.
The IAASB approved International Standard on Sustainability Assurance 5000 on 20 September 2024. The final text of the standard will be submitted to the certification of the Public Interest Oversight Board (PIOB).
Upon PIOB’s approval, which is expected before the end of 2024, the IAASB will publish the final standard along with additional guidance and application materials.
The International Auditing and Assurance Standards Board (IAASB) has issued new supplementary guidance on the application of the International Standard on Auditing for Audits of Financial Statements of Less Complex Entities (ISA for LCE):
The International Ethics Standards Board for Accountants (IESBA) has updated its Questions and Answers (Q&A) publication on the definitions of listed entity and public interest entity (PIE) in the IESBA Code of Ethics.
The U.S. Securities and Exchange Commission’s (SEC) approved the Public Company Accounting Oversight Board’s (PCAOB) new quality control standard and related amendments to its standards, rules, and forms.
The SEC also approved PCAOB’s new standard: AS 1000, General Responsibilities of the Auditor in Conducting an Audit, along with related amendments to other PCAOB standards.
