Regulatory developments in the US and Europe will foster more robust, transparent, and standardized global sustainability reporting.

Probability: Very High

Financial Impact: Add Cost

The Corporate Sustainability Reporting Directive (CSRD) in Europe ¹, the Sustainability Disclosure Requirements (SDR) in the UK ², and the U.S. Securities and Exchange Commission (SEC)³ proposed rules aim to provide stakeholders with better tools to evaluate companies’ sustainability performance and to reduce greenwashing. Harmonizing these standards will lead to more reliable and comparable data globally, which is crucial for investors and other stakeholders in making informed decisions.

Companies should prepare for these changes by:

• Familiarizing themselves with the new requirements and timelines.
• Ensuring that their reporting systems and internal controls can produce the required disclosures.
• Engaging with legal counsel and sustainability consultants to navigate the complexities of the new regulations.
• Considering the broader implications of ESG factors on their business models and strategies.

Sources:

1. https://dart.deloitte.com/USDART/home/publications/deloitte/heads-up/2023/csrd-corporate-sustainability-reporting-directive-faqs ↩︎
2. https://www.fca.org.uk/publication/policy/ps23-16.pdf ↩︎
3. https://www2.deloitte.com/us/en/pages/audit/articles/sec-climate-disclosure-guidance.html ↩︎

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