Duty of vigilance, CSRD...focus on the new european regulations
As the debate intensifies and we prepare for a veritable revolution in the field of non-financial reporting with the European CSRD (Corporate Sustainability Reporting Directive), the S&O Institute has teamed up with De Gaulle Fleurance to release the 4th edition of the Observatory of Societal Transitions, devoted to new regulations and litigation trends in relation to sustainability issues.
This increased regulatory pressure must be a lever of transformation for companies, but also an accelerator for the ecological and social transition.
Bénédicte Faivre-Tavignot, associate professor of strategy and co-founder of the S&O Institute.
At the opening event held on November 8 at the Philanthrolab in Paris, the report's authors shed light on the reinforcement of regulations, such as the duty of vigilance, and the implementation of new European directives, which represent an essential response to the accelerating pace of the major environmental and social challenges facing us: climate change, loss of biodiversity, growing inequalities and the divide within our societies.
The CSRD is going to turn all companies that are lagging behind on CSR issues. We need to see this new directive as an opportunity to work together to deploy more effective sustainability initiatives with impact.
Marieke Huysentruyt, associate professor and executive director of the Impact Company Lab.
• In 2023, only 3 new proceedings were instituted addressing French duty of vigilance obligations, i.e. 4 times less than last year.
• The proposed European directive on the duty of vigilance, the CS3D, is expected to affect 20% of companies (vs. 5% under French duty of vigilance requirements).
• Economic penalties for non-compliance with duty of vigilance obligations may be as great as 5% of a company’s overall turnover.
• The CSRD directive will enter into force progressively starting from 1 January 2024.
• 12 is the number of ESRS (Environmental and Social Reporting Standards) that all large companies, whether listed or not, subject to the CSRD, will be required to use preparing their sustainability report.
• 2026 is the year in which listed SMEs, subject to the CSRD, will be required to prepare their sustainability report according to separate standards, subject to the possible simplification of their obligations.
• According to the Grantham Research Institute’s Report, in 2022 more than 2,000 lawsuits were filed in over 40 different countries addressing matters related to global warming, 25% of which have been filed against Companies.
• Green bonds represent 7% of the global bond market, compared to 5% the previous year.
The challenge isn’t for the company to be more transparent on these sustainability indicators, but for it to take risks to be more virtuous, committed by investing more in just transition initiatives.
Gilles Vermot-Deroches, chef citizenship officer de Schneider Electric.
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You can also find summary report of all the new European directives ans regulations concerning sustainability issues.