Regulatory Frameworks

The Global Shift Toward Mandatory Carbon Disclosure

Regulatory frameworks are laws and guidelines established by governments or international bodies that mandate how companies must report their greenhouse gas emissions and other sustainability-related information. The landscape is rapidly changing from voluntary to mandatory reporting.

CSRD (EU Corporate Sustainability Reporting Directive)

The Corporate Sustainability Reporting Directive (CSRD) is a landmark EU regulation that requires large companies and listed SMEs to publish regular reports on their environmental and social impact activities. It aims to put sustainability reporting on the same level as financial reporting.

Learn more about CSRD on the European Commission website.

• Scope: Over 50,000 companies across the EU.
• Double Materiality: Requires reporting on both how the company is affected by climate change and its own impact on the planet.

SEC Climate Disclosure Rule (USA)

The U.S. Securities and Exchange Commission (SEC) has adopted rules requiring public companies to disclose certain climate-related information, including GHG emissions and climate risks that could have a material impact on their business, results of operations, or financial condition.

Visit the SEC website for official details.

CBAM (EU Carbon Border Adjustment Mechanism)

CBAM is a climate measure that aims to prevent the risk of carbon leakage and support the EU's increased ambition on climate mitigation. It puts a carbon price on imports of a selection of goods that are particularly carbon-intensive, ensuring that EU products are not undercut by imports from countries with less stringent climate policies.

Official info can be found on the European Commission's CBAM page.

ISSB (International Sustainability Standards Board)

The ISSB was created to develop a comprehensive global baseline of high-quality sustainability disclosure standards to meet investors' information needs. It builds on the TCFD (Task Force on Climate-related Financial Disclosures) recommendations and SASB standards.

Read about the ISSB and IFRS Sustainability Standards.