By enforcing the new rules, businesses will be held more accountable for their impact on society and will be guided to build an economy that benefits people and the environment. Anyone who is interested in the environmental and societal footprint would be able to access data about these footprints. Meanwhile, the new extended requirements are tailored to various sizes of companies and provide them with enough time to prepare.
In practice, businesses will need to report on how their business model affects the environment and people, as well as how external sustainability factors (like climate change and human rights) impact them. In this way, investors and other stakeholders will be able to make better-informed decisions regarding sustainability.
By amending the 2014 non-financial reporting directive (NFRD), the CSRD strengthens the existing non-financial reporting rules, which are no longer appropriate for the EU's transition to a sustainable economic model.
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