Sustainability reporting regulation: Current situation and future developments

Sustainability reporting (SR) is going through crucial times with an increasing demand from stakeholders for useful, reliable and comparable information, and SR regulation plays a key role in its SR’s evolution and potential improvement. In this chapter we analyze the current developments regarding SR regulation in Europe, highlighting the main changes incorporated by the new Corporate Sustainability Reporting Directive (CSRD) and the main characteristics of the new European Sustainability Reporting Standards (ESRS) drafts, also comparing the social ones with the Global Reporting Initiative (GRI) proposals while additionally considering the IFRS foundation’s first steps. Our results show, first, that the European Union (EU) has extended the scope, information and assurance requirements of SR; second, that the social ESRS proposals are closely aligned with the GRI ones; third that the EU proposal looks to be, at the moment, wider than the IFRS Foundation one; and, fourth, that scope, target audience, double materiality and assurance are currently challenging topics.