Speciale Hannover Messe

SPECIAL HANNOVERMESS E 2023 17 These companies are also responsible for assessing the information applicable to their subsidiaries. The rules also apply to listed SMEs, taking into account their specific characteristics. An opt-out will be possible for listed SMEs during a transi- tional period, exempting them from the application of the directive until 2028. For non-European companies, the re- quirement to provide a sustainability re- port applies to all companies generating a net turnover of EUR 150 million in the EU and which have at least one subsid- iary or branch in the EU exceeding cer- tain thresholds. These companies must provide a report on their environmental, social and governance (ESG) impacts, as defined in this directive. The European Financial Reporting Advisory Group (Efrag) will be responsible for devel- oping draft European standards. The Euro- pean Commission will adopt the final ver- sion of the standards as a delegated act, following consultations with EU member states and a number of European bodies. Application date and next steps The application of the regulation will take place in four stages: reporting in 2025 on the financial year 2024 for companies al- ready subject to the Nfrd; reporting in 2026 on the financial year 2025 for large com- panies that are not currently subject to the Nfrd; reporting in 2027 on the financial year 2026 for listed SMEs (except micro under- takings), small and non-complex credit in- stitutions and captive insurance undertak- ings; reporting in 2029 on the financial year 2028 for third-country undertakings with net turnover above 150 million in the EU if they have at least one subsidiary or branch in the EU exceeding certain thresholds. Un- der the Corporate Sustainability Reporting Directive (Csrd), companies that fall within its scope will be required to disclose infor- mation on their sustainability policies, risks, and impacts in a structured, standardized, and digital format. This includes informa- tion on the company’s environmental, so- cial, and governance (ESG) performance, as well as its approach to sustainability-re- lated risks and opportunities. The Csrd also aims to align sustainability reporting with other reporting frameworks, such as the Task Force on Climate-related Financial Disclosures (Tcfd), and to promote the use of common sustainability reporting stand- ards. The exact requirements will depend on the final version of the Csrd, which is still under review. Environmental, Social, Governance ESG, which stands for Environmental, Social, Governance, is an acronym used in the financial and economic context to indicate all those responsible investment (RI) activities that pursue typical financial management objectives while taking into account environmental, social, and govern- ance factors. Specifically, ESG primarily re- fers to a series of measurement criteria and standards (many of which are still in devel- opment) for the environmental, social, and governance activities of an organization. These criteria translate into a set of oper- ational standards that a company’s oper- ations must adhere to in order to ensure the achievement of certain environmental, social, and corporate governance (ESG) outcomes. These criteria are then used by investors to evaluate and make investment decisions. ESG criteria into analyses has therefore become central, not only with re- gard to the activity of institutional investors but also for financial advisors. This repre- sents a true shift that calls on all companies to define a clear strategy for transitioning to more sustainable business models, with a long-term perspective. The urgency is also driven by competitiveness reasons: companies that are unable to measure and report the impact of their business on the environment and society will be penalized compared to competitors. @anto_pelle