Sustainability update

April 2024


  • EC calls upon CEAOB to develop guidelines on limited assurance
  • EP approved sector-specific sustainability reporting standards delay
  • EP adopts its position on Green Claims Directive
  • ESMA seeks input on technical regulatory standards for external reviewers
  • ISSB decides its priorities for next two years

Feature story

CSDDD reaches final steps in EU’s legislative process

On 15 March, the Council finally reached a final agreement on the Corporate Sustainability Due Diligence Directive (CSDDD). The approval of the final text has been postponed more than five times, while the Belgian Presidency having to introduce several changes to the provisional agreement reached in December 2023 to secure a majority among Member States. The agreement contains significant alterations introduced by the Council, including:

  • a significantly wider scope, capturing only a fraction of European companies compared to the scope agreed initially
  • a heightened emphasis on the upstream supply chain, resulting in a narrower scope of activities
  • restrictive provisions on civil liability
  • the elimination of all references to directors’ remuneration

The European Parliament (EP) Legal Affairs Committee (JURI) provisionally approved the agreement on 19 March.

The next step in the formal legislative process is for the EP to vote the final text during the Plenary session on 24 April.

EU developments

EC calls upon CEAOB to develop guidelines on limited assurance

The European Commission (EC) invited the Committee of European Auditing Oversight Bodies (CEAOB) to develop non-binding guidelines to assist auditors and other assurance services providers in sustainability assurance engagements under the Corporate Sustainability Reporting Directive (CSRD). The EC noted that these limited assurance guidelines should:

  • take into account the International Auditing and Assurance Standards Board’s (IAASB) work on the International Standard on Sustainability Assurance (ISSA) 5000 and any other available elements to meet EU legislation.
  • focus on EU-specific elements and the content of the assurance report

CEAOB is expected to develop guidelines by the end of July 2024. The proposed guidelines should be submitted to public consultation and will eventually be adopted later in 2024.

The EC also requested CEAOB to provide technical advice on specific add-ons and possible carve-outs to ISSA 5000 for the upcoming EU assurance standard. CEAOB should deliver by May 2025.

Read more


Climate risks management addressed in latest EC communication

The EC issued a communication concerning the management of climate risks,  alongside the first EU Climate Risk Assessment by the European Environmental Agency (EEA). The EEA emphasises the necessity for the Corporate Sustainability Reporting Directive (CSRD) to mandate companies to explain the interplay between both branches of double materiality.

The EC communication delineates action points in four primary categories:

  1. strengthening governance structures for managing climate risks
  2. improving access to high-quality climate data and tools in cooperation with EEA
  3. safeguarding critical infrastructure against climate risks and strengthen EU solidarity mechanisms
  4. investing in resilience by fostering green finance

Read more


EC takes stock of Clean Transition Dialogues

The EC adopted a communication outlining the outcomes of the Clean Transition Dialogues, which involved industry and social partners to support the implementation of the European Green Deal. Within this communication, the EC pledges to:

  • continue shaping and implementing the European Green Deal
  • enhance the usability of the sustainable finance framework
  • use the carbon removal certification framework to promote new business models and reward nature-based solutions
  • establish a voluntary digital platform to identify obstacles to the adoption of clean technologies, without imposing new reporting requirements
  • simplify the regulatory framework by reducing reporting requirements by 25%, without undermining its policy objectives. The EC has prepared rationalisation plans, to be reported in the upcoming Commission’s Annual Burden Survey

Read more


EP approved sector-specific sustainability reporting standards delay

The EP approved the provisional agreement to delay the adoption of sector-specific sustainability reporting standards and reporting standards for non-EU companies by two years. However, co-legislators stressed that the EC should adopt sector-specific sustainability reporting standards in eight unspecified areas as soon as those standards are ready. The EC will determine the priority sectors.

The Council has to formally approve the text.

Read more


EP adopts its position on Green Claims Directive

On 12 March, the EP adopted its position on the Green Claims Directive establishing rules for validating voluntary green claims. During a press conference, co-rapporteurs MEP Cyrus Engerer (S&D/Malta) and MEP Andrus Ansip (RE/Estonia) explained that the directive targets greenwashing and protects the environment, consumers, and businesses that concretely contribute to the environment. Key provisions of the adopted text include:

  • mandating verification of green claims by accredited third-party conformity assessment body
  • prohibiting claims solely based on carbon offsetting
  • imposing penalties of up to 4% of annual turnover for companies engaging in greenwashing practices

Following the EU elections, the new EP will be tasked with further advancing this file.

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EP approves provisional agreement on Carbon removals certification

On 10 April, the EP adopted the provisional agreement on the voluntary certification framework for carbon removals during its plenary session. The certification framework strengthens the EU’s ability to quantify, monitor, and verify carbon removal activities. The adopted text sets out:

  • a voluntary-based certification scheme
  • rules for the registration and issuance of certified carbon removal units
  • monitoring obligations and liability rules for operators

The Council also has to formally approve the text before it can be published in the EU Official Journal.

Read more


SMSG responded to ESMA’s GLESI

The Securities and Markets Stakeholder Group (SMSG) responded to ESMA’s Consultation on the Draft Guidelines on Enforcement of Sustainability Information (GLESI). SMSG recommends:

  • keeping up-to-date guidelines to help stakeholders comply with the sustainable finance regulatory framework
  • maintaining flexibility in the application and enforcement of the regulatory framework application
  • sharing experiences and approaches in applying new requirements with National Competent Authorities (NCAa) in the Sustainability Reporting Working Group (SRWG)
  • monitoring the application of the rules by non-supervised entities and non-EU-corporates
  • addressing the definitional unclarities in the translation of GLESI into different languages

Accountancy Europe has also responded to ESMA’s consultation providing ideas for ESMA and enforcers to enhance coordination with stakeholders.

Read our response


ESMA seeks input on regulatory technical standards for external reviewers

The European Securities and Markets Authority (ESMA) has released a consultation paper on draft Regulatory Technical Standards (RTS) for the registration and supervision of external reviewers under the EU Green Bond Regulation (EuGB). ESMA seeks input on the following criteria:

  • senior management, board and analytical resources
  • sound and prudent management of the external reviewer
  • management of conflicts of interests
  • knowledge and experience of analysts
  • outsourcing of assessment activities
  • forms, templates and procedures for registration

Stakeholders can provide their feedback until 14 June 2024. ESMA will submit the technical standards to the EC by December 2024

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EIOPA analyses pension funds alignment to EU taxonomy

The European Insurance and Occupational Pensions Authority (EIOPA)  published a factsheet on the investments of occupational pension funds. The figures analyse how closely Institutions for Occupational Pension Provisions (IORP) investments in equity and corporate bonds align with the EU Taxonomy of sustainable activities. According to EIOPA, 4.5% of these investments are aligned with EU Taxonomy while the 26.1% are eligible for alignment. on the investments of occupational pension funds. The figures analyse how closely Institutions for Occupational Pension Provisions (IORP) investments in equity and corporate bonds align with the EU Taxonomy of sustainable activities. According to EIOPA, 4.5% of these investments are aligned with EU Taxonomy while the 26.1% are eligible for alignment.

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International developments

ISSB decides its priorities for next two years

The International Sustainability Standards Board (ISSB) has agreed its strategic direction for its two-year work plan:

  • prioritising the International Financial Reporting Standards (IFRS) S1 and IFRS S2 implementation
  • placing lower priority on enhancing Sustainability Accounting Standards Board (SASB) standards while beginning new research and standard-setting projects

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IESBA published next Strategy and Work plan

The International Ethics Standards Board of Accountants (IESBA) prioritises ethics in business judgement to increase public trust on organisations’ activities in its Strategy and Work Plan (SWP) for 2024-2027.The SWP highlights two key areas:

  • addressing culture and governance in accounting firms
  • expanding the applicability of the International Code of Ethics for professional accountants beyond the accountancy profession

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IOSCO updated 2023-2024 Work programme

On sustainability-related matters, the International Organization of Securities Commissions (IOSCO) has added to its workplan:

  • establishing a new workstream on green finance
  • continuing its engagement with the ISSB
  • finalising its work on voluntary carbon markets
  • reviewing the proposed assurance and ethics standards by the IAASB and IESBA

Read more


OECD global corporate sustainability report 2024

The Organisation for Economic Co-operation and Development (OECD) launched the Global Corporate Sustainability Report examining how global market practices are evolving among listed companies. The key policy messages are:

  • sustainability-related disclosure frameworks may need to be flexible on companies’ capacity
  • regulators may consider requiring large, listed companies to obtain assurance of their sustainability-related information. Also, jurisdictions may require companies to obtain assurance of specific sustainability-related disclosures
  • regulators may consider requiring or recommending the disclosure of information relevant for investors to assess if companies may develop new technologies

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Court pauses US SEC’s Climate Disclosures Rule

Multiple stakeholders across different states have filed a lawsuit against the U.S. Securities and Exchange Commission’s (SEC) Climate Disclosures Rule.. As a result, the implementation of the rule is on hold pending a court decision on its constitutional and statutory validity.

Read more

Other news



This curated content was brought to you by Vita Ramanauskaité, Accountancy Europe Manager, Head of Sustainability, since 2015. You can send her tips by email, follow her on X and connect with her on LinkedIn.