AUDITING ESG

WHAT

The European Union (EU) has emerged as a global leader in setting standards for future sustainability.
As a strong sign of this, the EU committed itself to the Sustainable Development Goals (SDGs) as part of the UN 2030 Agenda for Sustainable Development. The focus of the UN Agenda is mainly on three pillars – Environmental, Social and Governance.
As part of this commitment, the launch of the European Green Deal put in place policies that aim to make the EU climate neutral by 2050. This includes the integration of ESG into every investment and finance process within the European Union. The European Green Deal Investment Plan (EGDIP) will “mobilise at least € 1 trillion in sustainable investments over the next decade“ in line with this commitment.
To increase transparency, provide tools for investors to identify sustainable investment opportunities and support the EU’s sustainable development, the European Commission implemented the following regulations within its sustainable finance action plan the follwing regulations:
The Taxonomy Regulation (EU 2020/852) establishes a common green classification system within the EU to determine which investments qualify as sustainable enabling companies to raise ESG funding and financial institutions to design green financial products.
The draft Corporate Sustainability Reporting Directive (“CSRD”, COM/2021/189 final) requires companies to disclose all material information on its sustainability-related impacts, risks and opportunities. Sustainability information should be presented in the Sustainability Statements that are part of the management report in accordance with applicable European Sustainability Reporting Standards (ESRS) developed by EFRAC.