April 15, 2023


Mandated Sustainability Disclosure in the EU Will Impact North American Firms

Are you ready for the tsunami of sustainability disclosure requirements coming this year for European Union-based publicly-traded and private companies?  And for North American-headquartered companies with interests in Europe?  And for U.S. publicly-traded companies with the coming Securities and Exchange Commission Final Rule on climate-related material disclosures?


The EU’s Corporate Sustainability Reporting Directive will require an estimated 500,000 EU-based companies to report annually on the impact of corporate activities on the environment and society (with independent verification of report content). This means that many EU peers of North American companies will be under the new rules for greatly-expanded disclosure. 


Refinitiv, part of the London Stock Exchange Group, analyzed thousands of companies based outside of the EU to determine if those firms would be subject to new EU rules. According to the Refinitiv analysis, more than 10,000 “foreign” companies with listings on regulated exchanges in EU countries, and more than 100 companies not listed for trade in the EU but having more than 150 million Euros (US$163 million) in local revenues, will be covered by the new rule.


From the Refinitiv analysis: 

  • One third of companies to be required to report under the new rules are U.S. based.
  • Canadian companies are expected to account for 13%.
  • UK companies are expected to account for 11%.
  • Corporations based in other nations expected to be covered by smaller percentages of the total: Japan, Australia, Cayman Islands, Bermuda, China, Switzerland, Turkey.

Important note for non-EU companies:  the coming European rules will “likely” be more demanding of companies for disclosures than will be the long-expected SEC climate-related disclosure rules, writes Dieter Holger in The Wall Street Journal, which is our Top Story below.


Holger’s top line: “Thousands of American, Canadian and British companies will have to step up their sustainability reporting under European Union rules set to take effect starting in the next few years.” 


He explains that this is an important regulatory move by the European Union (of 27 nations) to increase visibility into corporate GHG emissions and gender pay differences on the European continent. For example, there are 82 annual disclosure requirements proposed in the CSRD, including GHG emissions and related plans aligned with the 2015 Paris Agreement goals, and third-party assurance will be required.


The Wall Street Journal feature provides us with an excellent review of the Refinitiv analysis, and important background on the EU rules (still in final development) that will be in place later this year. 


And there are other standards and regulations underway including the climate disclosure rules anticipated from the SEC in the US, and The International sustainability Standards Board (ISSB), working as part of the International Financial Reporting Standards Foundation (overseeing IFRS corporate reporting standards) is close to finishing guidelines for the information that corporations should report to investors.  Note that the U.S.-based Sustainable Accounting Standards Board (SASB) is now part of ISSB, which is a non-governmental organization developing IFRS sustainability disclosures.


The G&A Institute team has been working with client companies to help them prepare for these expanded disclosure requirements.  If your company has not been preparing the coming tsunami of disclosure regulations, the time to begin is now.  Connect with us for more information.


Top Story
Sustainability Standard Setters & Policy Makers
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ESG / Sustainable & Responsible Investment
Asset Owners & Managers, Ratings Agencies
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Corporate Sustainability / ESG
Disclosure, Reporting, Corporate Initiatives
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Stakeholders That Matter
Developments, Trends, Corporate Actions Affecting Stakeholders
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Global Sustainability
News & Developments of Note
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Sustainability Data in Focus
Developments in Data, Research, Trends
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U.S. Climate Actions
Updates from and about Washington, DC
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A Postscript from G&A: 
If the State of Florida is where “woke” goes to die (re: Governor Ron DeSantis) then New York City is where “awakened professional investors” are busily advancing the serious consideration of ESG factors in their asset management activities.  Check out the story here.

Eyes on Europe
ESG Regulations in Europe
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