Since the first application of the EU Corporate Sustainability Reporting Directive (“CSRD”) to companies in 2024, two projects have been underway to produce detailed sustainability reporting standards: (i) the EU’s Sustainability Reporting Standards, with separate standards for EU companies (the “ESRS”) and groups with non-EU parents (the “N-ESRS”) reporting under CSRD and (ii) the International Sustainability Standards Board’s (“ISSB”) standards published by the International Financial Reporting Standards (IFRS) Foundation. As states around the world adopt sustainability reporting standards by reference to the ISSB standards, either by directly adopting those standards or by producing local standards derived from ISSB, world-wide groups will produce sustainability reports by reference to more than one set of standards.[1]

States and regulators now have the opportunity to address the divergence that has developed internationally. In this In Depth, we discuss the challenges raised by different sustainability standards around the world and the steps that states and authorities are taking to develop an equivalence or passporting system.

(more…)