From 2024, EU companies will have to report on their sustainability

In the future, large companies in the European Union will have to inform consumers about the sustainability of their activities.

Negotiators from the EU states and the European Parliament agreed on new reporting requirements that will apply to companies from 2024, as announced by the Parliament and the French presidency of the EU states. Both sides have yet to formally confirm the agreement.

Transition period until 2028 for small and medium-sized EU companies

Specifically, according to Parliament, the new rules should apply to large companies with more than 250 employees and a turnover of 40 million euros. They would have to report on their impact on the environment, human rights and social standards, among other things. This data should be independently verified and certified. Companies from outside the EU with an annual turnover of at least €150 million would have to comply with equivalent regulations.

“Financial and sustainability reporting will be on an equal footing, and investors will finally have access to reliable, transparent and comparable data,” it said. According to the Council of the EU States, exceptions should be possible for small and medium-sized companies in a transitional period until 2028.

CSU MPs warn of challenges for medium-sized companies

The CSU MP Angelika Niebler nevertheless complained that the agreement was unsatisfactory for German medium-sized companies. The fact that small and medium-sized companies listed on the stock exchange “should be obliged to report on sustainability can pose huge challenges for the companies concerned,” said Niebler. “They have to change their processes, hire additional staff and strictly monitor compliance. All of this costs our companies a lot of time and money.”