ESG CSRD SEC Sustainability Reporting ISSB Climate Disclosure

Introduction

The regulatory landscape for ESG reporting is rapidly evolving, with mandatory requirements expanding across jurisdictions. This article examines the major frameworks and their implications for global companies.

European Union: CSRD and ESRS

The Corporate Sustainability Reporting Directive (CSRD) represents the most comprehensive ESG reporting regime globally.

  • Scope: All large companies and listed SMEs (approx. 50,000 entities)
  • Timeline: Phased implementation from 2024-2028
  • Standards: European Sustainability Reporting Standards (ESRS) covering environmental, social, and governance matters
  • Assurance: Limited assurance initially, moving to reasonable assurance
  • Digital Reporting: Mandatory XBRL tagging for EU Single Access Point

United States: SEC Climate Disclosure Rules

The SEC finalized climate disclosure rules in 2024 (currently stayed pending litigation). Key requirements include:

  • Scope 1 and Scope 2 emissions disclosure for large accelerated filers
  • Climate risk management disclosure
  • Board and management oversight of climate risks
  • Financial statement impacts of severe weather events

Global Standards: ISSB

The International Sustainability Standards Board (ISSB) has issued:

  • IFRS S1: General Requirements for Disclosure of Sustainability-related Financial Information
  • IFRS S2: Climate-related Disclosures
  • Adopted by multiple jurisdictions including UK, Japan, Australia, and Brazil

Other Jurisdictions

  • UK: TCFD-aligned disclosure requirements for listed companies and large private companies
  • Canada: Proposed mandatory climate disclosure for certain reporting issuers
  • Japan: Mandatory climate disclosure for TSE Prime Market companies
  • Singapore: Mandatory climate reporting from FY2025
  • India: BRSR (Business Responsibility and Sustainability Report) for top 1000 listed companies