Significant changes are coming to sustainability reporting in Europe. From 2022, the Corporate Sustainability Reporting Directive (CSRD) will bring in mandatory ESG disclosure for all large or listed companies operating in the EU – expanding current non-financial reporting requirements from 11,000 companies to more than 50,000. As a result, many North American companies who do business in the EU will be included. This session will review the incoming changes and updates on the new sustainability reporting standards that will apply, for which GRI has been appointed by the European Commission to co-construct. Requiring double-materiality reporting of impacts and building on the widespread adoption of the GRI Standards, these developments will have a significant role in the global convergence of sustainability reporting.

1. GreenBiz22 Breakout Panel
Moderated by
Matt Rusk
Head of GRI’s Regional Hub of N. America
Rusk@Globalreporting.org
What New EU
Reporting
Standards Mean
for North America
February 16th, 2022
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updates at this Link

2. Agenda
• EU Reporting Standards Updates, Effects & Landscape
Overview
• Panel Intros
• Panellist Discussion
• Audience Questions

3. Global trend
Drive towards the creation of a comprehensive corporate
reporting regime based on a two-pillar reporting structure and
a core set of common standards for each pillar and on equal
footing
• Pillar 1 – Strengthened financial reporting
Focus: impact on companies' disclosures addressing the financial
implications of sustainability issues
• Driving this pillar: EU CSRD, IFRS’ ISSB creation, SEC Climate and Social
Capital explorations
• Pillar 2 – Sustainability reporting
Focus: all impacts a company is having on society and the
environment and hence their contributions towards the goal of
sustainable development
• Driving this pillar: EU CSRD and growing stakeholder
expectations
• This two-pillar system is deemed “Double Materiality” by EU

4. Double Materiality
IFRS Foundation
International Financial International Sustainability
Reporting Standards (IFRS) Standards Board (ISSB)
SASB Standards
Global Reporting Initiative (GRI)
GRI Sustainability Reporting Standards
EFRAG
European Sustainability Reporting Standards

5. EU Creation of Sustainability Reporting Standards
The directive (CSRD) states that companies will need to
disclose to new reporting standards. The creation of those
standards is overseen by the advisory group (EFRAG). Those
standards will be new EU Sustainability Reporting
Standards ESRS
European Financial
Reporting Advisory
Group
EU Sustainability
Reporting Standards
“ESRS”
Corporate Sustainability
Reporting Directive
“CSRD”
CSRD update to the Non-Financial
Reporting Directive “NFRD”

6. GRI Role in Creation of Sustainability Reporting Standards
GRI is working with EFRAG as a “co-constructor” of the new ESRS

7. • The GRI standards are the most widely adopted
sustainability reporting standards in the world and are used by:
• 25+ years of sustainability reporting guidance and Standard
creation experience
• EU and GRI shared commitment to a multi-stakeholder
approach and standards to discloses on organizations
impact outward on the environment, society and the economy
Why is GRI a Co-Constructor?
10,000
organizations
in over 100
countries
73%
of the world’s
250 largest
companies
67%%
of global
fortune 500
54%
of EU companies
to meet non-
financial reporting
requirements
European sustainability
reporting standards should build on
and contribute to the progress of
existing standards and frameworks
that are widely used by companies.
I welcome this Statement of
Cooperation between EFRAG and
GRI as an important step towards
promoting convergence between
European and global sustainability
reporting standards.”
- John Berrigan, Director General for
Financial Stability, Financial Services
and Capital Markets Union, European
Commission

8. Key Aspects of Proposed CSRD
Corporate Sustainability Reporting Directive
Timing of Key Events 2022:
• Mid Year/ October: Draft of ESRS available mid-year
• December: EU-Directive in member states legislation
2023:
• 1st set of Sustainability Reporting Standards finalized
2024:
• Reports on 2023 data required
• 2nd set of Sustainability Reporting Standards finalized
Companies Affected All large companies meeting at least 2 out 3 criteria:
> 250 employees and/or
> €40M Turnover and/or (Approx. 45.1M USD)
> €20M Total Assets (Approx. 22.6M USD)
Listed companies - Small and medium listed companies get an extra 3 years to comply.
Affecting approximately 49,000 directly, covering > 75% of total EU companies’ turnover
Scope of Reporting Requirements Double materiality: Sustainability risk and opportunities affecting the company and companies’
impact on society and environment
Assurance Requirements Mandatory – limited level of assurance
Including:
• Integration in Auditor’s Report,
• Involvement of key audit partner,
• Scope to include EU Taxonomy and process to identify key relevant information.
Location of ESRS Disclosures Inclusion in the Management Report
Disclosure Format To be submitted in electronic format (in XHTML format in accordance with ESEF regulation)

9. How will
North
American
Companies
Be Impacted
As members of global
value chains
As owner of EU-based
subsidiaries with
meeting 2/3 criteria
(Employees, Revenue, Assets)
As owners of
EU-listed companies
EU aims to influence
reporting policies in
other jurisdictions

10. Panel
Data tagging and one access
portal info

11. www.globalreporting.org
global-reporting-initiative-gri @GlobalReportingInitiative @GRI_Secretariat
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