The European Commission has published a collection of frequently asked questions to help businesses understand their obligations under the new EU corporate sustainability reporting rules (on which we’ve previously commented here).

According to the press release from the Commission, the FAQs are “part of the Commission’s continuous effort to make the EU sustainable finance framework more usable for companies and reduce the administrative burden on them” and “take into account input received from companies and cover issues such as the scope of the rules, application dates, and exemptions”.

It is a comprehensive document that covers everything from the criteria that apply to determine whether entities are covered by the new regime, the rules relating to any applicable exemptions, what it means to use reasonable efforts to obtain estimates of necessary information from entitles in the value chain, deadlines for publication, requirements for third party undertakings, and the process for approving auditors to conduct assessments. Particularly helpful is a flowchart (at page 12) which sets out the process for determining whether an entity is subject to sustainability requirements and from which financial year.

Commenting on the publication of the FAQs, Mairead McGuinness, Commissioner for Financial Services, Financial Stability and Capital Markets Union, said: “The EU has taken major steps in building a comprehensive sustainable finance framework over the past six years, encouraging companies to embark on their transition paths. Our focus now is to ensure that our tools are usable and effective, while continuing to reduce the administrative burden on companies. The FAQs provide important clarifications and will further reduce the need for companies to seek external legal or consultancy advice for applying the rules. Companies are working hard to be more sustainable, which helps strengthen their competitiveness in the medium term, and I aim to ensure that our framework assists them in that process”.

To read the FAQs in full, click here