Report: EU proposal for a ‘Sustainability Reporting Directive – CSRD’. Impact and challenges for Italian companies
The paper introduces the results of the considerations and insights carried out by representatives of the business community during the webinar organised by Eurispes in collaboration with Strategies and Development Consultants SSC, Interest – Integrated Reporting for SME Transparency and GRI, held in Milan in February 2022. The Eurispes project for the creation of a “Laboratory on Sustainability” was presented on the occasion. This is a permanent working table, open to the collaboration of scholars, experts, operators, for the in-depth study of the opportunities-conditionalities for companies in the acceleration process towards a model of sustainable development.
The recommendations presented in the document relate to the challenges that have opened up for Italian companies and are linked to the following European and national innovations:
Within the framework of the policies that the EU is promoting in an increasingly incisive approach to sustainable development, in compliance with the call of the United Nations to intensify actions in what has been called the “Decade of Action”, is the proposed “Sustainability Reporting Directive – CSRD”, which will come into force in 2023 and is destined to have a great impact on the operations of Italian companies.
The Directive revises the obligation of companies to draw up a ‘sustainability report’ (starting from 20 million turnover); it defines the standards to be followed in compulsory reporting ( which means that it will no longer be possible to report on the basis of one’s own criteria); it establishes that reporting must be both final and prospective (which means that the company will have to illustrate not only what it has done in the past but also what it plans to do in the future); it defines new conditions regarding the corporate directors’ accountability. Internationally, for example in Germany, clear signs are already emerging about the prosecution of entrepreneurs who omit to disclose the applied sustainability standards (ESG) in their reporting, or who apply inappropriate or erroneous standards, thus covering themselves with misleading operations or, at the very least, misleading environmentalism (green washing).
The European Banking Authority (EBA) has already issued a document that makes it compulsory for banks to report on the sustainability of their investments (in terms of Governance, Social and Environmental – ESG) and has defined a set of ESG risk indicators that must be included in the clients’ valuation algorithms (a process that is already being applied regardless of the directive and that is being considerably accelerated).
Big companies, which have already introduced ESG and sustainability certification systems, require information and compliance from the supply chain in order to be able to certify the sustainability of their products; this is a conditionality that leads to the replacement of suppliers that do not submit sustainability reports (this process is also being applied regardless of the European directive).