The EU’s latest initiative to enhance ESG disclosures will expand the requirements of earlier initiatives and bring considerably more companies within its scope.

On 5 January 2023, the Corporate Sustainability Reporting Directive (CSRD) entered into force in the EU. The CSRD is the EU’s latest initiative to improve the quality and comparability of corporate ESG disclosures. The CSRD uses the term “sustainability” to refer to environmental, social (including human rights), and governance factors. The CSRD will considerably increase both the number of companies that are within the scope of the EU’s ESG reporting regime and the detail and extent of the ESG disclosures that must be published.