Sustainability is no longer just a buzzword—but a new golden standard in business, driving businesses to balance profitability with responsibility for a greener, more ethical future.
The EU has renewed its effort to instil sustainability as a standard business practice. EU citizens are increasingly putting businesses in the hot seat in aims of businesses facing their impacts on society and the environment. Consequently, sustainability is becoming a non-negotiable in themodus operandiof businesses; at least in the EU.
To enable this growing practice, the EU focuses on the Corporate Social Responsibility (CSR) and the Corporate Sustainability Due Diligence (CSDD). Together, these aid to improve environmental standards in business and foster sustainable and responsible corporate behaviour for a just transition towards a sustainable economy.
Corporate sustainability is multi-faceted, with positive change being the coveted aim. However, to bring about this change, a significant body of ever-evolving legislation needs to be adhered to. These laws vary from reporting obligations on financial (Corporate Sustainability Reporting Directive (CSRD) Directive (EU) 2022/2464) and non-financial matters (Non-Financial Reporting Directive 2014/95/EU). Then there are other, more technical, laws such as the Taxonomy Regulation (Regulation (EU) 2020/852), which establishes conditions for an economic activity to qualify as environmentally sustainable.
In essence this body of legislation introduces various obligations and recommendations for companies to dutifully address and mitigate any negative impact that they may cause onsociety and the environment, including within their global supply chain.
Sources
- Corporate social responsibility (CSR) (europa.eu)
- Sustainability, due diligence, responsible business – European Commission (europa.eu)
- Corporate sustainability reporting – European Commission (europa.eu)
- EU taxonomy for sustainable activities – European Commission (europa.eu)
Originally published 18 September 2024.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
