EU Sustainability Reporting Moves Forward with CDP and EFRAG Collaboration
- Muhammad Ahmad
- Nov 14, 2024
- 2 min read
CDP’s climate disclosure platform and the EU’s sustainability standards align, easing the burden on companies
CDP and EFRAG align disclosure standards to simplify reporting for thousands of companies
CDP’s environmental questionnaire now aligns with EU Sustainability Reporting Standards (ESRS).
European companies can fulfill multiple reporting requirements simultaneously, improving efficiency.
This partnership signals progress toward unified global environmental standards.
The Carbon Disclosure Project (CDP) and the European Financial Reporting Advisory Group (EFRAG) have announced a landmark interoperability between CDP’s widely used environmental questionnaire and the European Union’s new Sustainability Reporting Standards (ESRS). This alignment will ease companies' reporting processes by allowing them to meet EU regulatory requirements and CDP disclosure demands through a single, consistent approach.
This interoperability is crucial as the EU expands its Corporate Sustainability Reporting Directive (CSRD), requiring thousands of companies to disclose their environmental, social, and governance (ESG) performance. By synchronizing CDP’s questionnaire with the ESRS framework, the collaboration helps businesses reduce the administrative burden, enhances data quality, and sets a benchmark for future global reporting standards.
Technical Focus
The EU’s CSRD, which mandates ESG reporting for over 50,000 European companies, is part of the broader European Green Deal and aligns with the EU’s target of becoming climate-neutral by 2050. CDP’s questionnaire is a key tool companies worldwide use to disclose climate-related data to investors and stakeholders. This alignment allows businesses already using CDP to integrate CSRD requirements seamlessly, fostering better-quality disclosures.
With this partnership, CDP’s questionnaire will reflect ESRS elements, eliminating redundant disclosures for European companies. CDP’s CEO emphasized, “This collaboration will help companies simplify their reporting while meeting critical regulatory and stakeholder expectations.” By combining forces, CDP and EFRAG reinforce the value of transparency and consistency in sustainability reporting.
This development is a promising step towards more streamlined global ESG standards. As organizations continue to harmonize frameworks, companies, and stakeholders will benefit from a clearer, more efficient sustainability reporting landscape.