[UPDATE RE THE OMNIUS PROPOSAL HERE]
The European Union’s Corporate Sustainability Reporting Directive is a regulation requiring covered companies to disclose information on what they see as the risks and opportunities arising from social and environmental issues, and on the impact of their activities on people and the environment.
The CSRD impacts not only EU-based companies, but also non-EU companies that have substantial activities or a physical presence in the EU. This means that many large US-based companies must comply with the CSRD’s extensive sustainability reporting requirements which cover some potentially very sensitive topics.
Ensuring compliance will be a cross-organization project involving significant
input from employment legal and HR professionals who will need to consider issues
such as gathering the relevant data in a legally compliant way, advising on
consultation obligations with workers’ representatives, the scope and content of
relevant disclosures and any remediation work identified as a result of data gathered
Determining a company’s compliance obligations can be viewed as a three-stage process, involving a number of areas of the business:
- Phase 1 – assessing whether the CSRD applies to the organization and, if so, the date from which reporting starts.
- Phase 2 – assessing which reporting obligations are triggered by the materiality requirements.
- Phase 3 – reporting in practice. From an HR perspective the most relevant ESRS will be those set out in ESRS S1 (own workforce) and ESRS S2 (workers in the value chain) although there may be some overlap with other ESRS, for example
those that apply in relation to governance or general business conduct.
For more on this, read our alert here, or contact your Baker McKenzie employment lawyer.