Sustainability update

May 2024


  • European Parliament approved agreement on ESG rating activities
  • European Commission issues corrigendum to ESRS
  • IFRS Foundation and EFRAG publish interoperability guidance
  • ISSB continues its sustainability standards related work

Feature story

Accountancy Europe welcomes CSDDD approval despite weakened provisions

The European Parliament (EP) approved the final text of the Corporate Sustainability Due Diligence Directive (CSDDD) on 24 April. The CSDDD is a pivotal step towards more corporate accountability, advancing human rights and environmental protection whilst creating a level playing field for companies in the European Union (EU). The final text includes significant changes compared to the provisional agreement reached in December 2023 to secure a majority among Member States (MS). Nevertheless, it remains a landmark legislation which will enable European companies to gain more insights into their supply chains and adopt a climate transition plan. The CSDDD’s provisions will be applied in:

  • 2027 by companies with more than 5000 employees
  • 2028 by companies with more than 3000 employees
  • 2029 by companies with more than 1000 employees

Third-country companies are also included in the scope and the year of application will depend on the turnover they generate in the EU.

On 15 May, the EU ambassadors at Coreper approved the final text. The final sign-off on new law will take place at Council level on 24 May. Following this, the CSDDD will be published in the EU Official Journal and will enter into force 20 days later. MS will then have two years to transpose the Directive into national law.

Accountancy Europe welcomes the adoption of the new Directive as a significant step forward in advancing responsible business practices. You can read our welcoming statement here.

EU developments

EP approved agreement on ESG rating activities

On 24 April, the EP approved the provisional agreement on Environmental, Social, and Governance (ESG) rating activities. Key elements of the agreement include:

  • the European Securities and Market Authority (ESMA) will authorise ESG rating providers
  • ESG ratings can be provided separately
  • EU-authorised ESG rating providers can endorse those non- EU providers wishing to operate in the EU
  • ESG rating providers can provide other activities without setting up a separate legal entity if their operations are separated. This derogation does not apply to consulting, auditing, or credit rating activities

Once the Council approves the text, the regulation will take effect 18 months after its entry into force.

Read more


EC issues corrigendum to ESRS

The European Commission (EC) issued the corrigendum to the European Sustainability Reporting Standards (ESRS) correcting typos, references, and other inconsistencies within the standards’ text.

Read more


Report on monitoring capital flows to sustainable investment

The EU Platform’s on Sustainable Finance (Platform) report proposes a framework to measure effective contribution of finance towards the EU Green Deal objectives. The framework relies on precise methodology and data structure. It integrates a bottom-up representation of the real economy along with financial sector instruments. Also, it considers transitional plans for financial and non-financial undertakings. The report represents an intermediate view that can be tested and expanded when more data are available via reporting obligations. The Platform will publish a final report providing an overview of national assessments of investment by the end of its mandate.

Read more


Sustainability-related recommendations in Enrico Letta’s report on Single Market

Enrico Letta, President of the think tank Jacques Delors Institute and former prime minister of Italy, published a report setting out recommendations on how to strengthen the Single Market. The report focuses on the Single Market’s future challenges such as the need for further education, strategic investments, sustainability, and international outlook. Sustainability-related recommendations, amongst others, include:

  • developing financial instruments like green bonds by 2029 to attract private capital for green infrastructure projects
  • harmonising labelling rules to mitigate greenwashing and misleading green claims
  • creating a European Green Guarantee (EGG) framework to support lending to green investment projects and companies

Read more


ESMA’s report on ESG funds’ names

ESMA issued guidelines on funds’ names using ESG or sustainability-related terms. These funds can use sustainability-related terms if they use at least 80% of their investment to meet environmental, social characteristics, or sustainable investment objectives. These guidelines are meant to:

  • safeguard investors against unjustified or exaggerated sustainability claims
  • provide asset managers with measurable and precise criteria to assess their ability to use ESG or sustainability-related terms in funds’ names

Read more


“CSRD essentials”: definite guide to CSRD

Global Reporting Initiative (GRI) together with MEP Pascal Durand (S&D/France) and the Lefebvre – Sarrut Group issued a publication on the Corporate Sustainability Reporting Directive (CSRD). A series of 11 briefings explains and navigates through the complexities of the new directive. Accountancy Europe participated as a contributor to this project.

Read more


We mean Business Coalition on Taxonomy workability

We Mean Business Coalition issued a white paper on how the EU green taxonomy reporting legislation is working in practice. They analysed reports of 100 companies outlining some areas of improvement:

  • financial and non-financial companies can do better in applying the regulation
  • regulators can simplify reporting requirements to minimise interpretation issues
  • regulators can increase relevance by developing more taxonomy activities or narrowing the reporting burden to specific sector

Read more



International developments

IFRS Foundation and EFRAG publish interoperability guidance

The International Financial Reporting Standards (IFRS) Foundation and EFRAG issued guidance material on interoperability. It illustrates:

  • the alignment between the International Sustainability Board’s (ISSB) IFRS Sustainability Disclosure Standards and the
  • how companies can comply with both sets of standards

Read more


ISSB continues its sustainability standards related work

The ISSB issued the IFRS Sustainability Disclosure Taxonomy (ISSB Taxonomy) to enable investors to analyse and compare sustainability-related financial disclosures efficiently.

Moreover, it will start soon working on research projects on the  new IFRS sustainability standards development on:

  • biodiversity, ecosystems, and ecosystem services; and
  • human capital


IASB consults on climate and other uncertainties in financial statements

The International Accounting Standards Board (IASB) will consult on climate-related and other uncertainties in financial statements in the third quarter of 2024. The consultation will be open for 120 days and will contain:

  • examples of how an entity applies IFRS Accounting Standards to report the effects of climate-related and other uncertainties in financial statements
  • illustrative examples to accompany IFRS Accounting Standards

Read more


IFRIC interpretation on Climate-related Commitments

The IFRS Interpretations Committee (IFRIC) issued an interpretation on how net-zero commitments would be accounted under IAS 37 Provisions, Contingent Liabilities and Contingent Assets. The IFRIC concluded that there is no need to add a specific standard-setting project to the workplan, that the IASB approved.

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.