The Corporate Sustainability Reporting Directive: Transforming Corporate Reporting Landscapes

Abstract

The degradation of the environment represents one of the greatest impacts on society and simultaneously harbors one of its greatest challenges. It would be reasonable to address this issue by targeting the largest contributors to the problem, namely the economy and the activities of economic undertakings. Be it overfishing the oceans, destroying habitats and carbon sinks by deforestation, or the general emissions of greenhouse gases. To protect the environment, it is essential to hold corporations accountable and regulate their actions. A prerequisite for this accountability is transparency regarding their actual impacts and actions. Without it, monitoring and enforcement are impossible. Corporate sustainability reporting is a key instrument in achieving this transparency. However, the evolution of this concept and the related frameworks has been fragmented, resulting in varied reporting practices worldwide. This diversity hinders uniformity, comparability, and ultimately the desired transparency. Recently the European Union has introduced a new reporting framework, the Corporate Sustainability Reporting Directive, which may represent the most comprehensive approach to date. But how does it fare in the international reporting landscape? In light of this background, this thesis compares the CSRD with two other globally dominant reporting instruments, the GRI and the ISSB IFRS. The comparative analysis is based on three elements relevant for a reporting framework capable of providing transparency to the environmental impacts of corporations: materiality, coverage of sustainability issues, and the detail and depth of reporting requirements. This juxtaposition aims to assess the CSRD's impact on the sustainability reporting landscape and evaluate its potential as a new leading standard in this field.