EU agrees deal on company disclosures to combat greenwashing

Date:

Share post:


European Union flags flutter outside the European Commission headquarters in Brussels, Belgium, March 24, 2021. REUTERS

LONDON –The European Union has reached a deal on corporate sustainability reporting requirements for large companies from 2024, a European Parliament committee said on Tuesday.

Regulators have grown more worried about companies engaging in greenwashing, or making exaggerated climate-friendly claims to attract investor cash.

Members of the European Parliament and EU governments struck a provisional agreement on new reporting rules for large companies, parliament’s legal affairs committee said in a statement.

“This aims to end greenwashing and lay the groundwork for sustainability reporting standards at the (the) global level.”

Listed or unlisted companies with over 250 staff and turnover of 40 million euros ($42.13 million) will have to disclose environmental, social and governance (ESG) risks and opportunities, and the impact of their activities on the environment and people.

Some smaller listed companies will be subject to a lighter set of reporting standards, which they can opt out of until 2028, the committee said.

“From now on, having a clean human rights record will be just as important as having a clean balance sheet,” said Pascal Durand, who led negotiations for parliament.

Disclosures must be externally audited, Durand said, adding that the rules make room for new players to offer this service, and “not just leave it in the hands of… the Big Four,” a reference to EY, KPMG, Deloitte and PwC which dominate financial auditing.

The rules are part of a package which includes a “taxonomy” of what constitutes a green investment, and ESG disclosures for asset managers to help transition to a climate-neutral economy.

A formal vote by EU states and parliament is needed to ratify Tuesday’s deal.

EU is set to become front-runner in setting global sustainability reporting standards, the committee said.

The U.S. Securities & Exchange Commission has also proposed climate-related disclosures for companies, and the new International Sustainability Standards Board has proposed disclosure rules which mainly focus on climate.

But unlike the EU, neither require disclosures on a company’s impact on the environment.

($1 = 0.9495 euros)

RELATED STORIES

Plastic ‘neutrality’ a corporate greenwashing solution

What to look for when developers claim to be ‘green’

Sustainable fashion still a confusing concept for consumers — survey

Europe’s big meat and dairy firms accused of climate ‘greenwash’

Subscribe to our daily newsletter



Read Next

Don’t miss out on the latest news and information.

Subscribe to INQUIRER PLUS to get access to The Philippine Daily Inquirer & other 70+ titles, share up to 5 gadgets, listen to the news, download as early as 4am & share articles on social media. Call 896 6000.

For feedback, complaints, or inquiries, contact us.



LEAVE A REPLY

Please enter your comment!
Please enter your name here

spot_img

Related articles

Today’s latest news and headlines, Saturday, 1 October 2022

We’ve got the latest news stories and headlines in South Africa on Saturday, 1 October. The City of...

Native Americans in Harbor Springs Hold Vigil for Orange Shirt Day

People across North America Friday were recognizing Truth and Reconciliation Day, otherwise known as Orange Shirt Day. Orange...

LIV Tour makes Asian debut in Bangkok

GOLF: The eyes of the golfing world are turning to Thailand as the Land of Smiles gears...

Celebrate African Penguin Awareness Day with CMZoo

(COLORADO SPRINGS) — The Cheyenne Mountain Zoo (CMZoo) will be celebrating International African Penguin Awareness Day on...
English English Somali Somali