Non-financial reporting directive (NFRD) is an essential element of the European Union's sustainable development strategy. New regulations, such as the Corporate Sustainability Reporting Directive (CSRD), the Due Diligence Directive (CSDDD), and the Sustainable Disclosure Regulation (SFDR), extend non-financial reporting obligations to more companies.
The role of BSP in the regulatory process
Business & Science Poland actively participated in consultations on new EU regulations related to non-financial reporting. The BSP presented a number of opinions to the European Commission on the rationalisation of reporting requirements and participated in detailed analyses as part of the #BSP Sustainable Finance Task Force working meetings. The key topic was the issue of data acquisition when reporting in accordance with the CSRD directive.
The CSRD Directive
The Corporate Sustainability Reporting Directive (CSRD) requires all large public-interest entities and companies listed on regulated markets in the EU to report non-financial information. This also includes certain third-country entities that generate a net turnover of more than EUR 150 million.
CSRD aims to harmonise and strengthen non-financial reporting standards to better reflect the sustainability of businesses. The co-legislators reached a political agreement on the directive on 21 June 2022 and the final text of the directive was published in the Official Journal of the EU on 16 December 2022.
CSDDD Directive
Corporate Sustainability Due Diligence Directive (CSDDD) obliges companies to carry out human rights and environmental due diligence throughout the value chain. The directive, the draft of which was published by the European Commission on February 23, 2022, aims to introduce the obligation for companies to adopt climate transformation plans. Work is underway on the requirements for these plans in the CSRD Directives and on prudential requirements for banks (CRD).
PAI and SFDR indicators
As part of the PSF, BSP also participated in EC consultations on PAI (Principal Adverse Impacts) indicators when reporting in accordance with the SFDR. The SFDR (Sustainable Finance Disclosure Regulation) requires financial institutions to disclose sustainability information, including PAI indicators, that reflect the negative environmental and societal impacts of investment activities.
Practical solutions and cooperation
The practical aspects of the new regulations on non-financial reporting and ESG indicators were the subject of numerous workshops and meetings with representatives of DG FISMA from the European Commission, the EBRD and the UKNF Regulatory Development Department. BSP is engaged in activities aimed at supporting Polish companies in adapting to the new reporting requirements.
Summary
BSP's non-financial reporting activities are crucial to supporting climate change and the sustainable development of businesses in the European Union. Participation in consultations and work on new regulations allows BSP to actively shape sustainable development policies, promote the interests of its members and support in the implementation of new reporting obligations.