Important Sustainability Regulation Updates in Europe and Worldwide

We’ve been tracking major updates from around the world on sustainability and ESG reporting regulations and standards over the past few months. The BDO Global team issued its quarterly bulletin, which provides important details, including:

• The International Sustainability Standards Board (ISSB) issued the first two sustainability standards, the IFRS S1 General Requirements for Disclosure of Sustainability-related Financial Information and the IFRS S2 Climate-related Disclosures. These standards will become effective on or after January 1, 2024, however, jurisdictions must first endorse the standards or otherwise bring them into law in order for them to become effective, and they may choose a later effective date. The ISSB will provide guidance and introduce programs that support those applying its standards. They have already received broad endorsement from many organizations, including the International Organization of Securities Commissions (IOSCO).
• The European Commission has adopted the European Sustainability Reporting Standards (ESRS) under the Corporate Sustainability Reporting Directive (CSRD), marking a major step toward the implementation of the law, with reporting set to begin for some companies as soon as 2025 related to the 2024 financial year. The European Commission published the revised set of ESRS in June, proposing multiple changes to the original draft ESRS release in November 2022, including significant transitional relief. Subsequently, the Commission adopted the ESRS on July 31, for use by all companies subject to the CSRD. 
• Since the publication of BDO Global’s quarterly bulletin, the SEC issued its final rule requiring companies to disclose material cybersecurity incidents and material information regarding their cybersecurity risk management, strategy and governance. According to the SEC’s Spring 2023 Regulatory Flexibility Agenda, the agency has delayed action on final rules addressing climate change disclosure and enhanced ESG disclosure for investment advisers and funds until October 2023. In addition, the SEC has postponed issuing proposed rules addressing human capital management and corporate board diversity until October 2023 and April 2024, respectively.
• The bulletin also includes summaries of recent updates across various jurisdictions as well as recent news from different standard setters. 

Read the PDF bulletin for full details, including what to expect in the coming months. And reach out to BDO’s Sustainability & ESG Center of Excellence to learn how regulations and standards impact your organization and how you can prepare for current and future reporting requirements.