U.S. Firms Confused on EU Sustainability Reporting

U.S. Firms Confused on EU Sustainability Reporting

January 5, 2024, IFR News

Paul Mertenskotter’s commentary was included in an IFR News article examining the effects on 3,000 U.S.-based companies that will fall under the European Union's Corporate Sustainability Reporting Directive (CSRD) by 2025. Paul analyzes how U.S. companies that fall under the scope of CSRD are preparing for the coming regulatory enforcement.

“2024 is a big year for (U.S.) companies to get prepared for CSRD,” Paul said. “It’s an enormous challenge and it requires a change in mindset.”

Paul also commented on the learning curve facing U.S. companies, saying, “Since many disclosures under the EU rules concern qualitative information, U.S. companies have to coordinate with internal teams that are entirely new to climate reporting. For instance, a raw materials company will have to involve its procurement department and customer relations department to assess the impact on workers throughout the value chain.”

“You can’t say one thing in one place and another thing in another place. For now, large U.S. companies are still assessing which of their EU-based subsidiaries are subject to the rules, and what kind of data they have to compile,” he added.