A new Corporate Sustainability Reporting Directive (CSRD) was adopted by the EU in April 2021 to meet the goals of the Paris Agreement on climate change. In the range of companies (which include those admitted to trading on an EU regulated market, large EU companies and groups, and non-EU companies generating annual EU revenues in excess of €150 million, with an annual net turnover of an EU branch of €40 million) they will have detailed reporting requirements on their ESG activities that must be disclosed alongside the company's financial statement. (Neil Robson, Brigitte Weaver, Christy Wilson more at lexology.com)

The Tracker describes the activity in the transposition of the directive on Corporate Sustainability Reporting in 27 EU member states and three EEA/EFTA countries. This update includes information and developments as of July 31, 2024, as well as additional comments from participating law firms.

Countries continue to make progress towards implementation. So far, 12 countries have adopted legislation implementing CSRD (at least in part), another ten have proposed legislation, and two more countries have held consultations.

In collaboration with leading law firms across Europe - once again updated its monthly CSRD Transposition Tracker. Tracker is available here .

(Michael R. Littenberg, Marc Rotter, Molly Connolly, Samantha Elliott, Peter Witschi, more at lexology.com)

Environmental, social, and governance (ESG) can be considered a megatrend, as it has an impact on a global scale. While the precise definition of ESG can be somewhat ambiguous and the measurement of ESG factors can be complex, stakeholders and regulators continue to attach increasing importance to ESG considerations.

If a firm is found to have poor ESG performance, it can have serious consequences, such as regulatory enforcement and litigation, and potentially affect the value of the firm. With this in mind, it is extremely important for firms to incorporate ESG considerations into their business strategies, ensure appropriate compliance measures are in place and take proactive measures to address potential issues as they arise. (Nima Moshgbar, Volker Popp, Doctor Veit Buetterlin-Goldberg, more at lexology.com)

With ESG, we sometimes forget that its result is, in addition to environmental and social, also the economic sustainability of companies. The ability to finance their development is directly related to this.

How does this relate to the issue of climate change?

Extreme weather fluctuations, decreasing water availability, mitigation and adaptation measures, rising insurance costs, changes in consumer behavior, demands for technological innovation, ESG regulation and many other factors enter the vocabulary of bankers when assessing risks from the moment you apply for a loan to its final approval.

It's understandable. Banks provide loans with the goal of being repaid. That is also why they assess more and more strictly whether the company is prepared for the consequences of climate change.

At ESG CLUB, we consider it important that responsible companies thrive. That is why we decided to organize another one ESG FOCUS webinar, through which we will bring a global and local view of the banking sector on the subject of risk assessment in the context of climate change. (More on esgklub.sk)

One of the most common myths about ESG is that it concerns only large companies. It's not true. Even small and medium-sized companies must take ESG data reporting seriously if they want to maintain their competitiveness and position in the supply chains of large companies. What does ESG reporting mean specifically for your company? Find out when and how to start working with it.

From the article you will learn:

• We start with ESG reporting - we conduct a double significance analysis.
• Why is ESG not a choice but a necessity even for small and medium-sized enterprises?
• ESG agenda - what you need to find out in the company at the very beginning.

The essence of ESG lies in the obligation of companies data capture and regularly publish sustainable practices. In the past, ESG was associated only with large corporations – we saw sustainability reports from banks, retail chains and multinational brands. However, legislation in this area made a big leap this year. (More on esgklub.sk)

Today's net-zero global governance fails to recognize some of the most important strategic actions companies can take to mitigate climate change. The standards were created primarily to guide companies in setting targets (e.g. through the Science Based Targets initiative) and to help companies track emissions reductions in their annual inventories (e.g. through the Greenhouse Gas Protocol). With the update of the guidelines, discussions began about how companies can report efforts to reduce wider emissions in society (such as carbon credits purchased and emissions avoided through product use). In response, we will explore how a focus on reducing emissions across the value chain is critical but insufficient to recognize and reward the full range of opportunities companies have to change wider systems. In addition to reporting on inventories and setting targets within GHG "scopes", a second reporting track is needed to benchmark and reward companies' efforts within their "spheres of influence". This article presents a framework that offers companies a meaningful and separate place to report efforts to use (a) their products to enable others to avoid emissions; (b) their purchasing power and (c) their policy advocacy. Recognizing and thus rewarding the commitment of subjects to broader societal interventions will be crucial to achieving the economy-wide transition to global net zero. (Kaya Axelsson, more at tandfonline.com)

Corporate social responsibility. A theme that has resonated in the Western world for decades. This modern trend does not avoid our country either, where it is gradually taking root and becoming part of the public discourse. ESG in Slovakia, but also abroad, represents a comprehensive approach to the evaluation of companies, which goes beyond traditional financial indicators and focuses on environmental, social and management aspects of business.

But how do ordinary Slovaks actually perceive this topic? Are these questions important to them when evaluating companies and their products? And are they willing to support responsible business even at the cost of higher costs? The answers to these questions are provided by the latest study of the Ipsos agency called ESG & Reputation Research. It offers a unique insight into the thinking of the Slovak population in the area of corporate responsibility and sustainability. The results reveal several surprising trends and paradoxes that illustrate the complexity of this issue in our domestic context. (More on esgklub.sk)

Effective July 25, the EU's Corporate Sustainability Due Diligence Directive (CSDDD), which has an indirect but major impact on Turkish companies, requires proactive management of human rights and environmental impacts. Companies must first conduct due diligence, establish effective codes of conduct, invest in green transformation, develop reporting mechanisms and engage in regular reporting. CSDDD is not only an obligation to comply with the rules, but also provides an ethical framework and business opportunities, which significantly contributes to long-term success.

Directive on due care for corporate sustainability (hereinafter referred to as "CSDDD ”), based on the UN Guiding Principles on Business and Human Rights (UNGPs) and the OECD Guidelines on Responsible Business for Multinational Companies, is considered an important achievement in the promotion of human rights and environmental protection. protection. (Lale Defne Mete, Tutku Sen, Bayrak, more on lexology.com)

Member States were supposed to implement the EU Corporate Sustainability Reporting Directive (hereafter " CSRD ") into national law by July 6, 2024. Most missed this deadline to finalize their laws. Travers Smith spoke to specialist advisers across 23 EU member states to find out what clients should look out for when completing their scope analysis, considering the nuances of reporting or assessing the risks of not reporting in accordance with the law.

To date, most businesses assess their CSRD exposure using the provisions of the Directive itself – a sensible approach when the lead time for the first CSRD report is long and for some the reporting deadline is as early as next year. It is also important to note that Member States generally transpose the provisions of the Directives quite faithfully, although differences may arise, especially in the case of "minimum harmonisation" Directives such as the Chemical Safety Directive, which sets a minimum but not an upper limit for standards. established by national law. This was seen in the case of the predecessor of the CSRD, the Directive on Non-Financial Reporting (hereafter “ NFRD "), in which some countries extended the scope to companies that were not included in the original directive.

1. Current status
2. Scope of national legislation
3. Reporting standards
4. Timing of messages
5. Fines
6. Next steps
7. Post script

(Sarah-Jane Denton, Alexandra MacBean, more at lexology.com)

CSRD is a European Union regulation aimed at providing detailed information on the sustainability of companies. The aim of this regulation is to ensure that companies will have to provide regular and detailed reports on how their activities affect the environment and society. These reports will have to be verified by independent auditors and will be publicly available.

On the other hand, the ESRS is an initiative that aims to create a central access point for information on the sustainability of companies across the EU. This system would allow easy access to sustainability information for all stakeholders, including investors, customers and citizens.

Both of these initiatives are part of the EU's wider efforts to promote sustainability and transparency. The main goal is to support the transition to a more sustainable economy that takes environmental and social aspects into account. (Co2AI)

The European Commission has issued detailed guidelines on the implementation of the EU Corporate Sustainability Reporting Directive (CSRD). CSRD, introduced through Directive (EU) 2022/2464, aims to increase transparency and accountability by introducing new sustainability reporting requirements for certain companies.

Scope and Applicability

The CSRD applies to:

• Big businesses.
• SMEs (excluding micro-enterprises) with transferable securities admitted to trading on regulated EU markets.
• Parent companies of large groups.
• Some entities from third countries that have significant business operations within the EU.

These entities must prepare sustainability information in accordance with the European Sustainability Reporting Standards (ESRS) and ensure compliance with the requirements of the digital taxonomy. This information must be included in the company's management report and must be subject to limited assurance by statutory auditors or independent assurance providers (IASPs). (More on esgnews.com)

On July 15, Directive (EU) 2024/1785 was published, which brings significant changes to Directive 2010/75/EU on industrial emissions. The new directive, effective from 4 August 2024, introduces various changes for integrated environmental permit (IPPC) activities and expands the AIA/IPPC system with new ones. It sets a deadline of 1 July 2026 for member states to ensure the implementation of the necessary laws.

One of the significant changes of the amendment is the inclusion of large plants for the production of batteries (not only assemblies) in the AIA/IPPC regime. It also introduces mandatory cases of "industrial transformation" and "deep industrial transformation" into the AIA/IPPC system.

Industrial transformation means adapting equipment covered by the AIA/IPPC in 2030-2050 and "contributing to the creation of a sustainable, clean, circular economy that is resource efficient and climate neutral by 2050". (Simone Cadeddu, Paola Bologna, more at lexology.com)

ESMA ( The European Securities and Markets Authority) recently proposed new guidelines on fund nomenclature conventions. In order to reduce the risk of greenwashing, the new guidelines state that funds intending to use ESG and sustainability-related terms in their name must ensure that at least 80 % investments show environmental or social characteristics. Funds that use sustainability-related terms should also "significantly" invest in sustainable investments. (Christopher Cembran, Fund Research MainStreet Partners, more at esgnews.it)

While there are still many questions about how all these policies will work and interact, the time has come for implementation. In the last month, two new regulations have been formally adopted: the EU Ecodesign Sustainable Products Regulation (ESPR) and the Business Sustainability Due Diligence Directive (CSDDD).

The ESPR is a framework regulation that will eventually require most products sold on the EU market (food and medicine being the only exception) to make their products more sustainable, or risk penalties will be determined by Member States. A crucial and challenging part of this rule is creation  digital product passports  containing information on materials, repair and recycling instructions and environmental properties. (Tim Mohin, more at esgnews.com)

ESG principles are an important factor for the long-term success and stability of your company. The reason is European Green Deal and the related green transformation of European economies. Despite this, awareness of ESG in Slovakia is low among managers and entrepreneurs. Find out what ESG is, what obligations it brings and why it will affect the future of your business today.

In the article you will learn:

• What is ESG?
• What obligations do companies have in connection with ESG?
• Why does the topic of ESG affect the entire economy?

(More on esgklub.sk)

Despite many national initiatives and updated EU guidelines aimed at facilitating cooperation in the field of sustainability, considerable legal uncertainty remains, especially regarding international ESG alliances. So the question remains: Is "more ESG in antitrust policy" needed? In Part I of our article, we summarized the current situation. This Part II explores the ongoing debate, reforms and future prospects, leading to practical guidance for companies to deal with ESG aspects in antitrust compliance. (Christian Ritz, Elena Wiese, Kyra Harmes, more at lexology.com)

On April 24, 2024, the European Parliament, after protracted negotiations, adopted the final text of Directive 2024/1760/EU ("Corporate Sustainability Due Diligence Directive" or "CSDDD"), which was published in the Official Journal of the EU on July 5, 2024. The CDDDD imposes new obligations for companies within their scope to prevent and mitigate negative impacts on human rights and the environment. These obligations relate to actual and potential human rights violations and negative environmental impacts caused by:

• the company's own operations;
• the operations of their subsidiaries;
• operations within the value chain, both upstream (production of goods, provision of services) and downstream (distribution, transportation and storage of products).

Companies covered by the CSDDD will need to incorporate due diligence on human rights risks and potential environmental damage using a risk-based approach. This means that if it is not possible to address all identified negative impacts at the same time, companies must prioritize their actions based on the severity and likelihood of these impacts. To fulfill this obligation, companies must develop a due diligence policy, draft a code of conduct (also applied to subsidiaries and business partners) and provide a description of the process and implementation of the due diligence policy, including measures to verify its effective application. (Melania Mazzonová, more at lexology.com)

Environmental, social and governance (ESG) criteria are increasingly important to businesses in all sectors, including law firms. ESG considerations cover a wide range of issues, from environmental impact and social responsibility to governance practices. For law firms, integrating ESG principles can improve their reputation, improve client relationships and contribute to long-term success.

According to studies published in several journals, companies that adopt strong ESG practices tend to outperform their peers financially and are more resilient to economic downturns.

For law firms, reputation is a critical asset. Companies known for their commitment to ESG principles can stand out in a competitive market. (Eduardo Magalhães Machado, more at lexology.com)

The European Securities and Markets Authority ( ESMA ), the EU's financial markets regulator and supervisor, has published an opinion (available here) on a European regulatory framework for sustainable finance outlining possible long-term improvements. The opinion just published is relevant because the authority emphasizes that it is the last missing element in ESMA's response to the European Commission's request for a contribution to solving the greenwashing problem.

While the authority recognizes that the framework is already well developed and includes safeguards against greenwashing, it also believes that in the long term the framework could be further developed to facilitate investors' access to sustainable investments.

Overall, according to ESMA, the European Commission should focus on certain aspects in order to improve the regulatory framework for sustainable financing. First, before any legislative initiative is put forward, consumer and industry testing should be done to ensure that the policy solutions are suitable for retail investors.opinion of ESMA, more at esgnews.it)

On July 5, 2024, the final text of the Corporate Sustainability Due Diligence Directive (CSDDD) was entered into the Official Journal of the EU. The CSDDD will enter into force on July 25, 2024. This is the last key step in the legislative process and a significant milestone in the implementation of the requirement that companies incorporate responsible business practices into due diligence processes and policies. The CSDDD is one of several legislative acts proposed by the EU within the framework of the European Green Deal.

The CSDDD establishes obligations of corporate due diligence. In particular, the CSDDD requires relevant companies to identify, prevent and mitigate potential actual adverse human rights and environmental impacts associated with their operations, including upstream and downstream impacts. It also seeks to provide access to complaint mechanisms and legal remedies for those affected by violations of the provisions of the CSDDD.

This article covers key aspects of CSDDD and details high-level guidance on how potentially affected companies can prepare. (More on lexology.com)