Sustainability Blog #21

The summer months are usually a bit slower when it comes to news on ESG legislation and publications. While the pace of updates has decreased, key initiatives and evolving regulations continue to shape the sustainability landscape of the EU. Primarily, there are some uncertainties about the Corporate Sustainability Reporting Directive (CSRD), which has now became the talk of the town, as first reports based on it will have to be published next year.

Since the introduction of the CSRD, many European countries have transposed it into their legislative systems. However, this has meant that various questions were raised on how to properly comply with the directive and how to report in accordance with the official European Sustainability Reporting Standards (ESRS). In response, the European Commission announced a new set of Frequently Asked Questions on the CSRD, aimed at supporting companies and other important stakeholders (for example auditors) in implementing the sustainability reporting requirements of the CSRD. The FAQs were published on 7 August, and you can find them here.

Moreover, in July, the European Securities and Markets Authority (ESMA) also contributed to this topic by publishing a Final Report on the Guidelines on Enforcement of Sustainability Information (GLESI) and a Public Statement on the first application of the European Sustainability Reporting Standards. These documents will support the consistent application and monitoring of sustainability reporting requirements. One of the most important sections of the report focuses on data collection, as ESMA urges companies to “carefully set up their systems of data collection and analysis, as well as internal controls” in order to meet the ESRS’ detailed reporting requirements and to conduct double materiality assessments.

You can find more information here.

ESMA has also released its Opinion on the Sustainable Finance Regulatory Framework, outlining key recommendations to enhance investor access to sustainable investments and promote financing for the transition to a sustainable economy. These recommendations include the introduction of basic sustainability disclosure requirements for all financial products, regulation of ESG data products, and the creation of categories for sustainable and transition-focused investment products. ESMA’s opinion highlights that while new regulations like the CSRD will improve transparency in sustainability issues for investors, market participants will still depend on ESG data providers, especially for companies not covered by the CSRD. This reliance underscores the importance of ensuring the quality of ESG data products. You can find the report here.

July also brought a very interesting new edition of the OECD Employment Outlook, an annual assessment of key labour market developments and prospects in OECD member countries. This year, a special focus has been on the characteristics of jobs that are likely to thrive because of the net-zero transition, including their attractiveness in terms of job quality, and comparing them with jobs in high-emission industries expected to shrink. The report predicts that a quarter of jobs in OECD countries will be affected by the net-zero transition. Across the OECD, 20% of the workforce is employed in green-driven occupations, also considering jobs that do not directly contribute to emissions reduction but are likely to be in demand because they provide goods and services needed for green activities. Conversely, about 7% of jobs are in greenhouse gas intensive sectors.

You can find the 2024 Employment Outlook here.