REPORT on the proposal for a Directive of the European Parliament and of the Council amending Directive 2013/34/EU, Directive 2004/109/EC, Directive 2006/43/EC and Regulation (EU) No 537/2014, as regards corporate sustainability reporting

DRAFT EUROPEAN PARLIAMENT LEGISLATIVE RESOLUTION

on the proposal for a Directive of the European Parliament and of the Council amending Directive 2013/34/EU, Directive 2004/109/EC, Directive 2006/43/EC and Regulation (EU) No 537/2014, as regards corporate sustainability reporting

(COM(2021)0189 – C9‑0147/2021 – 2021/0104(COD))

(Ordinary legislative procedure: first reading)

The European Parliament,

– having regard to the Commission proposal to Parliament and the Council (COM(2021)0189),

– having regard to Article 294(2) and Articles 50 and 114 of the Treaty on the Functioning of the European Union, pursuant to which the Commission submitted the proposal to Parliament (C9-0147/2021),

– having regard to Article 294(3) of the Treaty on the Functioning of the European Union,

– having regard to the opinion of the European Central Bank of 7 September 2021 [1],

– having regard to the opinion of the European Economic and Social Committee of 22 September 2021 [2],

– having regard to Rule 59 of its Rules of Procedure,

– having regard to the opinions of the Committee on Economic and Monetary Affairs, the Committee on Employment and Social Affairs, the Committee on the Environment, Public Health and Food Safety, the Committee on Foreign Affairs, the Committee on Development and the Committee on Women’s Rights and Gender Equality,

– having regard to the letter from the Committee on Industry, Research and Energy,

– having regard to the report of the Committee on Legal Affairs (A9-0059/2022),

1. Adopts its position at first reading hereinafter set out;

2. Calls on the Commission to refer the matter to Parliament again if it replaces, substantially amends or intends to substantially amend its proposal;

3. Instructs its President to forward its position to the Council, the Commission and the national parliaments.

<RepeatBlock-Amend>

<Amend>Amendment <NumAm>1</NumAm>

<DocAmend>Proposal for a directive</DocAmend>

<Article>Recital 1</Article>


Text proposed by the Commission	Amendment
(1) In its communication on the European Green Deal adopted on 11 December 201930 , the European Commission made a commitment to review the provisions concerning non-financial reporting of Directive 2013/34/EU of the European Parliament and of the Commission.31 The European Green Deal is the European Union’s new growth strategy. It aims to transform the Union into a modern, resource-efficient and competitive economy with no net emissions of greenhouse gases by 2050. It also aims to protect, conserve and enhance the Union's natural capital, and protect the health and well-being of citizens from environment-related risks and impacts. The European Green Deal aims at decoupling economic growth from resource use, and ensuring that all regions and citizens of the Union participate in a socially just transition to a sustainable economic system. It will contribute to the objective of building an economy that works for the people, strengthening the EU’s social market economy, helping to ensure that it is future-ready and that it delivers stability, jobs, growth and investment. These goals are especially important considering the socio-economic damage caused by the COVID-19 pandemic and the need for a sustainable, inclusive and fair recovery. In its proposal of 4 March 2020 for a European Climate Law, the European Commission proposed to make the objective of climate neutrality by 2050 binding in the Union.32	(1) In its communication on the European Green Deal adopted on 11 December 201930 , the European Commission made a commitment to review the provisions concerning non-financial reporting of Directive 2013/34/EU of the European Parliament and of the Commission.31 The European Green Deal is the European Union’s new growth strategy. It aims to transform the Union into a modern, resource-efficient and competitive economy with no net emissions of greenhouse gases by 2050. It also aims to protect, conserve and enhance the Union's natural capital, and protect the health and well-being of citizens from environment-related risks and impacts. The European Green Deal aims at decoupling economic growth from resource use, and ensuring that all regions and citizens of the Union participate in a socially just transition to a sustainable economic system so that no person and no place is left behind. It will contribute to the objective of building an economy that works for the people, strengthening the EU’s social market economy, helping to ensure that it is future-ready and that it delivers stability, jobs, growth and sustainable investment. These goals are especially important considering the socio-economic damage caused by the COVID-19 pandemic and the need for a sustainable, inclusive and fair recovery. In its proposal of 4 March 2020 for a European Climate Law, the European Commission proposed to make the objective of climate neutrality by 2050 binding in the Union.32
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30 COM(2019) 640 final.	30 COM(2019) 640 final.
31 Directive 2013/34/EU of the European Parliament and of the Council of 26 June 2013 on the annual financial statements, consolidated financial statements and related reports of certain types of undertakings, amending Directive 2006/43/EC of the European Parliament and of the Council and repealing Council Directives 78/660/EEC and 83/349/EEC (OJ L 182, 29.6.2013, p. 19).	31 Directive 2013/34/EU of the European Parliament and of the Council of 26 June 2013 on the annual financial statements, consolidated financial statements and related reports of certain types of undertakings, amending Directive 2006/43/EC of the European Parliament and of the Council and repealing Council Directives 78/660/EEC and 83/349/EEC (OJ L 182, 29.6.2013, p. 19).
32 Proposal for a Regulation of the European Parliament and of the Council establishing the framework for achieving climate neutrality and amending Regulation (EU) 2018/1999 (European Climate Law) [2020/0036 (COD)]	32 Proposal for a Regulation of the European Parliament and of the Council establishing the framework for achieving climate neutrality and amending Regulation (EU) 2018/1999 (European Climate Law) [2020/0036 (COD)]

</Amend>

<Amend>Amendment <NumAm>2</NumAm>

<DocAmend>Proposal for a directive</DocAmend>

<Article>Recital 2</Article>


Text proposed by the Commission	Amendment
(2) In its Action Plan: Financing Sustainable Growth the Commission set out measures to achieve the following objectives: reorient capital flows towards sustainable investment in order to achieve sustainable and inclusive growth, manage financial risks stemming from climate change, resource depletion, environmental degradation and social issues, and foster transparency and long-termism in financial and economic activity33 . The disclosure by undertakings of relevant, comparable and reliable sustainability information is a prerequisite for meeting those objectives. The European Parliament and the Council adopted a number of legislative acts as part of the implementation of the Action Plan on Financing Sustainable Growth. Regulation (EU) 2019/2088 of the European Parliament and of the Council34 governs how financial market participants and financial advisers are to disclose sustainability information to end investors and asset owners. Regulation (EU) 2020/852 of the European Parliament and of the Council35 creates a classification system of environmentally sustainable economic activities with the aim of scaling up sustainable investments and combatting greenwashing of financial products that unduly claim to be sustainable. Regulation (EU) 2019/2089 of the European Parliament and of the Council36 , complemented by Commission Delegated Regulations (EU) 2020/181637 , (EU) 2020/181738 and (EU) 2020/181839 , introduces environmental, social and governance (‘ESG’) disclosure requirements for benchmarks administrators and minimum standards for the construction of EU Climate Transition Benchmarks and EU Paris-aligned Benchmarks. Regulation (EU) No 575/2013 of the European Parliament and of the Council40 requires large institutions which have issued securities that are admitted to trading on a regulated market to disclose information on ESG risks from 28 June 2022. The new prudential framework for investment firms set by Regulation (EU) 2019/2033 of the European Parliament and of the Council41 and Directive (EU) 2019/2034 of the European Parliament and of the Council42 contains provisions concerning the introduction of an ESG risk dimension in the supervisory review and evaluation process (SREP) by competent authorities, and contains ESG risks disclosure requirements for investment firms, applicable from 26 December 2022. The Commission has also announced a proposal on a European Green Bond Standard in its Work Programme for 2021, following up on the Action Plan on Financing Sustainable Growth.	(2) In its Action Plan: Financing Sustainable Growth the Commission set out measures to achieve the following objectives: reorient capital flows towards sustainable investment in order to achieve sustainable and inclusive growth, manage financial risks stemming from climate change, resource depletion, environmental degradation and social issues, and foster transparency and long-termism in financial and economic activity33 . The disclosure by certain categories of undertakings of relevant, comparable and reliable sustainability information is a prerequisite for meeting those objectives. In its Guidelines on reporting climate-related information, the European Commission highlighted the benefits for companies to report on climate related information particularly by increasing awareness and understanding of climate related risks and opportunities within the company, diversifying investor base, creating a lower cost of capital and by improving constructive dialogue with all stakeholders. The European Parliament and the Council adopted a number of legislative acts as part of the implementation of the Action Plan on Financing Sustainable Growth. Regulation (EU) 2019/2088 of the European Parliament and of the Council34 governs how financial market participants and financial advisers are to disclose sustainability information to end investors and asset owners. Regulation (EU) 2020/852 of the European Parliament and of the Council35 creates a classification system of environmentally sustainable economic activities with the aim of scaling up sustainable investments and combatting greenwashing of financial products that unduly claim to be sustainable. Regulation (EU) 2019/2089 of the European Parliament and of the Council36 , complemented by Commission Delegated Regulations (EU) 2020/181637 , (EU) 2020/181738 and (EU) 2020/181839 , introduces environmental, social and governance (‘ESG’) disclosure requirements for benchmarks administrators and minimum standards for the construction of EU Climate Transition Benchmarks and EU Paris-aligned Benchmarks. Regulation (EU) No 575/2013 of the European Parliament and of the Council40 requires large institutions which have issued securities that are admitted to trading on a regulated market to disclose information on ESG risks from 28 June 2022. The new prudential framework for investment firms set by Regulation (EU) 2019/2033 of the European Parliament and of the Council41 and Directive (EU) 2019/2034 of the European Parliament and of the Council42 contains provisions concerning the introduction of an ESG risk dimension in the supervisory review and evaluation process (SREP) by competent authorities, and contains ESG risks disclosure requirements for investment firms, applicable from 26 December 2022. The Commission has also announced a proposal on a European Green Bond Standard in its Work Programme for 2021, following up on the Action Plan on Financing Sustainable Growth.
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33 COM(2018) 97 final.	33 COM(2018) 97 final.
34 Regulation (EU) 2019/2088 of the European Parliament and of the Council of 27 November 2019 on sustainability-related disclosures in the financial services sector (OJ L 317, 9.12.2019, p. 1).	34 Regulation (EU) 2019/2088 of the European Parliament and of the Council of 27 November 2019 on sustainability-related disclosures in the financial services sector (OJ L 317, 9.12.2019, p. 1).
35 Regulation (EU) 2020/852 of the European Parliament and of the Council of 18 June 2020 on the establishment of a framework to facilitate sustainable investment, and amending Regulation (EU) 2019/2088 (OJ L 198, 22.6.2020, p. 13).	35 Regulation (EU) 2020/852 of the European Parliament and of the Council of 18 June 2020 on the establishment of a framework to facilitate sustainable investment, and amending Regulation (EU) 2019/2088 (OJ L 198, 22.6.2020, p. 13).
36 Regulation (EU) 2019/2089 of the European Parliament and of the Council of 27 November 2019 amending Regulation (EU) 2016/1011 as regards EU Climate Transition Benchmarks, EU Paris-aligned Benchmarks and sustainability-related disclosures for benchmarks (OJ L 317, 9.12.2019, p. 17).	36 Regulation (EU) 2019/2089 of the European Parliament and of the Council of 27 November 2019 amending Regulation (EU) 2016/1011 as regards EU Climate Transition Benchmarks, EU Paris-aligned Benchmarks and sustainability-related disclosures for benchmarks (OJ L 317, 9.12.2019, p. 17).
37 Commission Delegated Regulation (EU) 2020/1816 of 17 July 2020 supplementing Regulation (EU) 2016/1011 of the European Parliament and of the Council as regards the explanation in the benchmark statement of how environmental, social and governance factors are reflected in each benchmark provided and published (OJ L 406, 3.12.2020, p. 1).	37 Commission Delegated Regulation (EU) 2020/1816 of 17 July 2020 supplementing Regulation (EU) 2016/1011 of the European Parliament and of the Council as regards the explanation in the benchmark statement of how environmental, social and governance factors are reflected in each benchmark provided and published (OJ L 406, 3.12.2020, p. 1).
38 Commission Delegated Regulation (EU) 2020/1817 of 17 July 2020 supplementing Regulation (EU) 2016/1011 of the European Parliament and of the Council as regards the minimum content of the explanation on how environmental, social and governance factors are reflected in the benchmark methodology (OJ L 406, 3.12.2020, p. 12).	38 Commission Delegated Regulation (EU) 2020/1817 of 17 July 2020 supplementing Regulation (EU) 2016/1011 of the European Parliament and of the Council as regards the minimum content of the explanation on how environmental, social and governance factors are reflected in the benchmark methodology (OJ L 406, 3.12.2020, p. 12).
39 Commission Delegated Regulation (EU) 2020/1818 of 17 July 2020 supplementing Regulation (EU) 2016/1011 of the European Parliament and of the Council as regards minimum standards for EU Climate Transition Benchmarks and EU Paris-aligned Benchmarks (OJ L 406, 3.12.2020, p. 17).	39 Commission Delegated Regulation (EU) 2020/1818 of 17 July 2020 supplementing Regulation (EU) 2016/1011 of the European Parliament and of the Council as regards minimum standards for EU Climate Transition Benchmarks and EU Paris-aligned Benchmarks (OJ L 406, 3.12.2020, p. 17).
40 Regulation (EU) No 575/2013 of the European Parliament and of the Council of 26 June 2013 on prudential requirements for credit institutions and investment firms and amending Regulation (EU) No 648/2012 (OJ L 176, 27.6.2013, p. 1).	40 Regulation (EU) No 575/2013 of the European Parliament and of the Council of 26 June 2013 on prudential requirements for credit institutions and investment firms and amending Regulation (EU) No 648/2012 (OJ L 176, 27.6.2013, p. 1).
41 Regulation (EU) 2019/2033 of the European Parliament and of the Council of 27 November 2019 on the prudential requirements of investment firms and amending Regulations (EU) No 1093/2010, (EU) No 575/2013, (EU) No 600/2014 and (EU) No 806/2014 (OJ L 314, 5.12.2019, p. 1).	41 Regulation (EU) 2019/2033 of the European Parliament and of the Council of 27 November 2019 on the prudential requirements of investment firms and amending Regulations (EU) No 1093/2010, (EU) No 575/2013, (EU) No 600/2014 and (EU) No 806/2014 (OJ L 314, 5.12.2019, p. 1).
42 Directive (EU) 2019/2034 of the European Parliament and of the Council of 27 November 2019 on the prudential supervision of investment firms and amending Directives 2002/87/EC, 2009/65/EC, 2011/61/EU, 2013/36/EU, 2014/59/EU and 2014/65/EU (OJ L 314, 5.12.2019, p. 64).	42 Directive (EU) 2019/2034 of the European Parliament and of the Council of 27 November 2019 on the prudential supervision of investment firms and amending Directives 2002/87/EC, 2009/65/EC, 2011/61/EU, 2013/36/EU, 2014/59/EU and 2014/65/EU (OJ L 314, 5.12.2019, p. 64).

</Amend>

<Amend>Amendment <NumAm>3</NumAm>

<DocAmend>Proposal for a directive</DocAmend>

<Article>Recital 2 a (new)</Article>


Text proposed by the Commission	Amendment
	(2 a) Diversity on company boards might have an influence on decision making, corporate governance and resilience.

</Amend>

<Amend>Amendment <NumAm>4</NumAm>

<DocAmend>Proposal for a directive</DocAmend>

<Article>Recital 8</Article>


Text proposed by the Commission	Amendment
(8) The ultimate beneficiaries of better sustainability reporting by undertakings are individual citizens and savers. Savers who want to invest sustainably will have the opportunity to do so, while all citizens should benefit from a stable, sustainable and inclusive economic system. To realise these benefits, the sustainability information disclosed in undertaking’s annual reports first has to reach two primary groups (‘users’). The first group of users consists of investors, including asset managers, who want to better understand the risks and opportunities that sustainability issues pose to their investments and the impacts of those investments on people and the environment. The second group of users consists of organisations, including non-governmental organisations and social partners, that wish to better hold undertakings to account for their impacts on people and the environment. Other stakeholders may also make use of sustainability information disclosed in annual reports. The business partners of undertakings, including customers, may rely on this information to understand, and where necessary report on, the sustainability risks and impacts through their own value chains. Policy makers and environmental agencies may use such information, in particular on an aggregate basis, to monitor environmental and social trends, to contribute to environmental accounts, and to inform public policy. Few individual citizens and consumers directly consult undertaking’s reports, but they may use such information indirectly such as when considering the advice or opinions of financial advisers or non-governmental organisations. Many investors and asset managers purchase sustainability information from third party data providers, who collect information from various sources, including public corporate reports.	(8) The ultimate beneficiaries of better sustainability reporting by undertakings are public authorities, individual citizens, including workers, and savers, trade unions and workers’ representatives to be adequately informed, and thereby to better engage in social dialogue. Savers who want to invest ethically and sustainably will have the opportunity to do so, while all citizens should benefit from a stable, sustainable and inclusive economic system. To realise these benefits, the sustainability information disclosed in undertaking’s annual reports first has to reach three primary groups (‘users’). The first group of users consists of policymakers and public authorities. The second group of users consists of investors, including asset managers, who want to better understand the risks and opportunities that sustainability issues pose to their investments and the impacts of those investments on people and the environment. The third group of users consists of civil society actors, including non-governmental organisations and social partners, that wish to better hold undertakings to account for their impacts on people and the environment or in the case of worker’s representatives wish to take part in the design of those reports. Other stakeholders may also make use of sustainability information disclosed in annual reports, notably to foster comparability across and within market sectors and assess, in line with Regulation (EU) 2020/852, the respect of the “do not significant harm” principle. The business partners of undertakings, including customers, may rely on this information to understand, and where necessary report on, the sustainability risks and impacts through their own value chains. Policy makers and environmental agencies may use such information, in particular on an aggregate basis, to monitor environmental and social trends, to contribute to environmental accounts, and to inform public policy. Few individual citizens and consumers directly consult undertaking’s reports, but they may use such information indirectly such as when considering the advice or opinions of financial advisers or non-governmental organisations. Many investors and asset managers purchase sustainability information from third party data providers, who collect information from various sources, including public corporate reports.

</Amend>

<Amend>Amendment <NumAm>5</NumAm>

<DocAmend>Proposal for a directive</DocAmend>

<Article>Recital 8 a (new)</Article>


Text proposed by the Commission	Amendment
	(8a) The market for sustainability information is rapidly growing, and the role of data providers is gaining in importance with the new obligations that investors and asset managers need to fulfil. With the increased availability of disaggregated data, sustainability information should come at a more reasonable cost. The amended Directive 2013/34 is expected to increase the comparability of data and harmonise standards. It is expected that the practices of data providers should converge and that expertise will grow in this area, with a vast potential for job creation. In the event that the review of this Directive concludes that the practices of data providers remain fragmented, rules should be introduced in order to further standardise those practices and increase their reliability.

</Amend>

<Amend>Amendment <NumAm>6</NumAm>

<DocAmend>Proposal for a directive</DocAmend>

<Article>Recital 9</Article>


Text proposed by the Commission	Amendment
(9) There has been a very significant increase in demand for corporate sustainability information in recent years, especially on the part of the investment community. That increase in demand is driven by the changing nature of risks to undertakings and growing investor awareness of the financial implications of these risks. That is especially the case for climate-related financial risks. Awareness of the risks to undertakings and to investments resulting from other environmental issues and from social issues, including health issues, is also growing. The increase in demand for sustainability information is also driven by the growth in investment products that explicitly seek to meet certain sustainability standards or achieve certain sustainability objectives. Part of that increase is the logical consequence of previously adopted Union legislation, notably Regulation (EU) 2019/2088 and Regulation (EU) 2020/852. Some of the increase would have happened in any case, due to fast-changing citizen awareness, consumer preferences and market practices. The COVID-19 pandemic will further accelerate the increase in users’ information needs, in particular as it has exposed the vulnerabilities of workers and of undertaking’s value chains. Information on environmental impacts is also relevant in the context of mitigating future pandemics with human disturbance of ecosystems increasingly linked to the occurrence and spread of diseases.	(9) There has been a very significant increase in demand for corporate sustainability information in recent years, especially on the part of the investment community and civil society. That increase in demand is driven by the changing nature of risks to undertakings and growing investor awareness of the financial implications of these risks. That is especially the case for climate-related financial risks. Awareness is also growing on the risks and opportunities to undertakings and to investments resulting from other environmental and climate issues and from health and social issues, including on child and forced labour. The increase in demand for sustainability information is also driven by the growth in investment products that explicitly seek to meet certain sustainability standards or achieve certain sustainability objectives and to ensure coherence with the ambition of the Paris Agreement, Convention on Biological diversity and Union policies. Part of that increase is the logical consequence of previously adopted Union legislation, notably Regulation (EU) 2019/2088 and Regulation (EU) 2020/852. Some of the increase would have happened in any case, due to fast-changing citizen awareness, consumer preferences and market practices. The COVID-19 pandemic will further accelerate the increase in users’ information needs, in particular as it has exposed the vulnerabilities of workers and of undertaking’s value chains. Information on environmental impacts is also relevant in the context of mitigating future pandemics with human disturbance of ecosystems increasingly linked to the occurrence and spread of diseases.

</Amend>

<Amend>Amendment <NumAm>7</NumAm>

<DocAmend>Proposal for a directive</DocAmend>

<Article>Recital 9 c (new)</Article>


Text proposed by the Commission	Amendment
	(9c) Legislative bodies should provide legal certainty. Undertakings, customers and trade unions, among others, should be allowed to agree upon guidelines that might support the application of this Directive.

</Amend>

<Amend>Amendment <NumAm>8</NumAm>

<DocAmend>Proposal for a directive</DocAmend>

<Article>Recital 10 a (new)</Article>


Text proposed by the Commission	Amendment
	(10a) The European Green Deal will require behavioural change to achieve its objectives. Consequently, there is a need to move from corporate short-termism, to more sustainable, longer-term decision-making. As a study for DG Justice and Consumers in July 2020 revealed, one of the root causes of corporate short-termism is the regulatory framework1a. Though not sufficient on its own, enhanced sustainability reporting can be an important incentive for more sustainable corporate decision-making and governance. Sustainability reporting is also essential to keep track of the progress made in implementing the European Green Deal.
	_________________
	1a Study on Directors Duties and Sustainable Corporate Governance, prepared for DG Justice and Consumers in July 2020

</Amend>

<Amend>Amendment <NumAm>9</NumAm>

<DocAmend>Proposal for a directive</DocAmend>

<Article>Recital 11</Article>


Text proposed by the Commission	Amendment
(11) The report on the review clause of the Non-Financial Reporting Directive (Directive 2014/95/EU), and its accompanying fitness check on corporate reporting, identified problems as to the effectiveness of that Directive48 . There is significant evidence that many undertakings do not disclose material information on all major sustainability-related topics. The report also identified as significant problems the limited comparability and reliability of sustainability information. Additionally, many undertakings from which users need sustainability information are not obliged to report such information.	(11) The report on the review clause of the Non-Financial Reporting Directive (Directive 2014/95/EU), and its accompanying fitness check on corporate reporting, identified problems as to the effectiveness of that Directive48 . There is significant evidence that many undertakings do not disclose material information on all major sustainability-related topics, especially climate-related information including all green-house gas emission and factors that affect biodiversity. The report also identified as significant problems the limited comparability and reliability of sustainability information. Additionally, many undertakings from which users need sustainability information are not obliged to report such information which underlines the need for a robust and affordable monitoring, reporting and verification framework and effective auditing within corporate sustainability reporting to ensure the reliability of data and avoid greenwashing and/or double accounting.
__________________	__________________
48 Publication office: please insert reference to Report from the Commission to the European Parliament, the Council and the European Economic and Social Committee on the review clauses in Directives 2013/34/EU, 2014/95/EU, and 2013/50/EU, and accompanying SWD- Fitness Check.	48 Publication office: please insert reference to Report from the Commission to the European Parliament, the Council and the European Economic and Social Committee on the review clauses in Directives 2013/34/EU, 2014/95/EU, and 2013/50/EU, and accompanying SWD- Fitness Check.

</Amend>

<Amend>Amendment <NumAm>10</NumAm>

<DocAmend>Proposal for a directive</DocAmend>

<Article>Recital 12</Article>


Text proposed by the Commission	Amendment
(12) In the absence of policy action, the gap between users’ information needs and the sustainability information reported by undertakings is expected to grow. This gap has significant negative consequences. Investors are unable to take sufficient account of sustainability-related risks and opportunities in their investment decisions. The aggregation of multiple investment decisions that do not take adequate account of sustainability-related risks has the potential to create systemic risks that threaten financial stability. The European Central Bank and international organisations such as the Financial Stability Board have drawn attention to those systemic risks, in particular in the case of climate. Investors are also less able to channel financial resources to undertakings and economic activities that address and do not exacerbate social and environmental problems, which undermines the objectives of the European Green Deal and the Action Plan on Financing Sustainable Growth. Non-governmental organisations, social partners, communities affected by undertakings’ activities, and other stakeholders are less able to hold undertakings accountable for their impacts on people and the environment. This creates an accountability deficit, and may contribute to lower levels of citizen trust in businesses, which in turn may have negative impacts on the efficient functioning of the social market economy. The lack of generally accepted metrics and methods for measuring, valuing, and managing sustainability-related risks is also an obstacle to the efforts of undertakings to ensure that their business models and activities are sustainable.	(12) In the absence of policy action, the gap between users’ information needs and the sustainability information reported by undertakings is expected to grow. This gap has significant negative consequences. Investors are unable to take sufficient account of sustainability-related risks and opportunities in their investment decisions. The aggregation of multiple investment decisions that do not take adequate account of sustainability-related risks has the potential to create systemic risks that threaten financial stability. The European Central Bank and international organisations such as the Financial Stability Board have drawn attention to those systemic risks, in particular in the case of climate. Investors are also less able to channel financial resources to undertakings and economic activities that address and do not exacerbate social and environmental problems, which undermines the objectives of the European Green Deal and the Action Plan on Financing Sustainable Growth and the objectives of the Paris agreement. Non-governmental organisations, social partners, communities affected by undertakings’ activities, and other stakeholders are less able to hold undertakings accountable for their impacts on people and the environment and the climate. This creates an accountability deficit, and may contribute to lower levels of citizen trust in businesses, which in turn may have negative impacts on the efficient functioning of the social market economy. The lack of generally accepted metrics and methods for measuring, valuing, and managing sustainability-related risks is also an obstacle to the efforts of undertakings to ensure that their business models and activities are sustainable. The lack of sustainability information also limits the ability of stakeholders, including civil society actors, trade unions and workers representatives to enter into dialogue with undertakings on sustainability matters.

</Amend>

<Amend>Amendment <NumAm>11</NumAm>

<DocAmend>Proposal for a directive</DocAmend>

<Article>Recital 13</Article>


Text proposed by the Commission	Amendment
(13) The report on the review clause of Directive 2014/95/EU, and its accompanying fitness check on corporate reporting, also recognised a significant increase in information requests for information about sustainability matters to undertakings in an attempt to address the existing information gap. In addition, ongoing expectations on undertakings to use a variety of different frameworks and standards are likely to continue and may even intensify as the value placed on sustainability information continues to grow. In the absence of policy action to build consensus on the information that undertakings should report, there will be significant increases in costs and burden for reporting undertakings and for users of such information.	(13) The report on the review clause of Directive 2014/95/EU, and its accompanying fitness check on corporate reporting, also recognised a significant increase in information requests for information about sustainability matters to undertakings in an attempt to address the existing information gap. In addition, a variety of different frameworks and standards are likely to continue and may even intensify as the value placed on sustainability information continues to grow. In the absence of policy action to build consensus on the information that undertakings should report, there will be significant increases in costs and burden for reporting undertakings and for users of such information.

</Amend>

<Amend>Amendment <NumAm>12</NumAm>

<DocAmend>Proposal for a directive</DocAmend>

<Article>Recital 15</Article>


Text proposed by the Commission	Amendment
(15) Articles 19a and 29a of Directive 2013/34/EU apply to large undertakings that are public-interest entities with an average number of employees in excess of 500, and to public-interest entities that are parent undertakings of a large group with an average number of employees in excess of 500 on a consolidated basis, respectively. In view of the growth of users’ needs for sustainability information, additional categories of undertakings should be required to report such information. It is therefore appropriate to require all large undertakings and all undertakings listed on regulated markets, except micro undertakings, to report detailed sustainability information. In addition, all undertakings that are parent undertakings of large groups should prepare sustainability reporting at group level.	(15) Articles 19a and 29a of Directive 2013/34/EU apply to large undertakings that are public-interest entities with an average number of employees in excess of 500, and to public-interest entities that are parent undertakings of a large group with an average number of employees in excess of 500 on a consolidated basis, respectively. In view of the growth of users’ needs for sustainability information, additional categories of undertakings should be required to report such information. It is therefore appropriate to require all large undertakings to report detailed sustainability information. In addition, all undertakings that are parent undertakings of large groups should prepare sustainability reporting at group level.

</Amend>

<Amend>Amendment <NumAm>13</NumAm>

<DocAmend>Proposal for a directive</DocAmend>

<Article>Recital 17 a (new)</Article>


Text proposed by the Commission	Amendment
	(17a) In order to ensure a level playing field on the single market, it is appropriate that third-country companies that are not established in the EU but provide goods and services inside the EU are subject to the same reporting rules than EU companies, or at least apply rules that are evaluated equivalent to the EU standards by the Commission, once implementing measures for those equivalence schemes are adopted.

</Amend>

<Amend>Amendment <NumAm>14</NumAm>

<DocAmend>Proposal for a directive</DocAmend>

<Article>Recital 18 a (new)</Article>


Text proposed by the Commission	Amendment
	Voluntary standarts for SMEs
	(18a) SMEs should be given the possibility to report according to standards that are proportionate to their capacities and resources. Listed and Non-listed SMEs can choose to use proportionate standards on a voluntary basis. The SME standards should set a reference for undertakings that are within the scope of the Directive regarding the level of sustainability information that they could reasonably request from SME suppliers, investees and clients in their value chains.

</Amend>

<Amend>Amendment <NumAm>15</NumAm>

<DocAmend>Proposal for a directive</DocAmend>

<Article>Recital 18 b</Article>


Text proposed by the Commission	Amendment
(71) Member States are invited to assess the impact of their transposition act on SMEs in order to ensure that they are not disproportionately affected, giving specific attention to micro-enterprises and to the administrative burden, and to publish the results of such assessments. Member States should consider introducing measures to support SMEs in applying the voluntary simplified reporting standards.	(18 b) Member States are invited to assess the impact of their transposition act on SMEs in order to ensure that they are not disproportionately affected, giving specific attention to micro-enterprises and to unnecessary administrative burden, and to publish the results of such assessments. Member States should consider introducing measures to support SMEs in applying the voluntary simplified reporting standards.

</Amend>

<Amend>Amendment <NumAm>16</NumAm>

<DocAmend>Proposal for a directive</DocAmend>

<Article>Recital 18 c (new)</Article>


Text proposed by the Commission	Amendment
	(18c) Certain economic activities in high-risk sectors are recognised as posing particularly significant sustainability risks. The list of high-risk sectors are based on existing sectoral OECD guidance. In order to ensure that this directive can also apply to such economic activities in high-risk sectors they should be defined and the power to adopt a delegated act in accordance with Article 290 of the Treaty on the Functioning of the European Union in respect of establishing a list economic activities in high-risk sectors of economic activity should be delegated to the Commission. This list should, to the extent possible, use the European NACE classification. Not all economic activities in those sectors could be considered as high-risk. The Commission should therefore aim at using the lowest classification level possible. It is of particular importance that the Commission carry out appropriate consultations during its preparatory work, including at expert level, and that those consultations be conducted in accordance with the principles laid down in the Interinstitutional Agreement of 13 April 2016 on Better Law-Making. In particular, to ensure their equal participation in the preparation of delegated acts, Parliament and the Council should receive all documents at the same time as Member States’ experts, and their experts should systematically have access to meetings of Commission expert groups dealing with the preparation of delegated acts.

</Amend>

<Amend>Amendment <NumAm>17</NumAm>

<DocAmend>Proposal for a directive</DocAmend>

<Article>Recital 19</Article>


Text proposed by the Commission	Amendment
(19) Directive 2004/109/EC of the European Parliament and of the Council49 applies to all undertakings with securities listed on regulated markets. In order to ensure that all undertakings with securities listed on regulated markets, including third country issuers, fall under the same sustainability reporting requirements, Directive 2004/109/EC should contain the necessary cross-references to any requirement on sustainability reporting in the annual financial report.	(19) Directive 2004/109/EC of the European Parliament and of the Council49 applies to all undertakings with securities listed on regulated markets. In order to ensure that all large undertakings with securities listed on regulated markets or business activities in the EU internal market, including third country issuers, fall under the same sustainability reporting requirements, Directive 2004/109/EC should contain the necessary cross-references to any requirement on sustainability reporting in the annual financial report.
__________________	__________________
49 Directive 2004/109/EC of the European Parliament and of the Council of 15 December 2004 on the harmonisation of transparency requirements in relation to information about issuers whose securities are admitted to trading on a regulated market and amending Directive 2001/34/EC (OJ L 390, 31.12.2004, p. 38).	49 Directive 2004/109/EC of the European Parliament and of the Council of 15 December 2004 on the harmonisation of transparency requirements in relation to information about issuers whose securities are admitted to trading on a regulated market and amending Directive 2001/34/EC (OJ L 390, 31.12.2004, p. 38).

</Amend>

<Amend>Amendment <NumAm>18</NumAm>

<DocAmend>Proposal for a directive</DocAmend>

<Article>Recital 21</Article>


Text proposed by the Commission	Amendment
(21) Articles 19a(3) and 29a(3) of Directive 2013/34/EU currently exempt all subsidiary undertakings from the obligation to report non-financial information where such undertakings and their subsidiary undertakings are included in the consolidated management report of their parent undertaking, provided this includes the required non-financial information. It is necessary, however to ensure that sustainability information is easily accessible for users, and to bring transparency about which is the parent undertaking of the exempted subsidiary undertaking which is reporting at consolidated level. It is therefore necessary to require those subsidiary undertakings to publish the consolidated management report of their parent undertaking and to include a reference in their management report to the fact that they are exempted from reporting sustainability information. That exemption should also apply where the parent undertaking reporting at consolidated level is a third country undertaking reporting sustainability information in accordance with the requirements of this Directive or in a manner equivalent to EU sustainability reporting standards.	(21) Articles 19a(3) and 29a(3) of Directive 2013/34/EU currently exempt all subsidiary undertakings from obligations to report some non-financial information where such undertakings and their subsidiary undertakings are included in the consolidated management report of their parent undertaking, provided this includes the required non-financial information and that certain information are broken down for each consolidated entity. It is necessary, however to ensure that sustainability information is easily accessible for users, and to bring transparency about which is the parent undertaking of the exempted subsidiary undertaking which is reporting at consolidated level. It is therefore necessary to require those subsidiary undertakings to publish the consolidated management report of their parent undertaking and to include a reference in their management report to the fact that they are exempted from reporting some sustainability information in their own management report.

</Amend>

<Amend>Amendment <NumAm>19</NumAm>

<DocAmend>Proposal for a directive</DocAmend>

<Article>Recital 22</Article>


Text proposed by the Commission	Amendment
(22) Article 23 of Directive 2013/34/EU exempts parent undertakings from the obligation to prepare consolidated financial statements and a consolidated management report where those undertakings are subsidiaries of another parent undertaking that complies with that obligation. It should be specified, however, that the exemption regime for consolidated financial statements and consolidated management reports operates independently from the exemption regime for consolidated sustainability reporting. An undertaking can therefore be exempted from consolidated financial reporting obligations but not exempted from consolidated sustainability reporting obligations where its ultimate parent prepares consolidated financial statements and consolidated management reports in accordance with Union law, or in accordance with equivalent requirements if the undertaking is established in a third country, but does not prepare consolidated sustainability reporting in accordance with EU law, or in accordance with equivalent requirements if the undertaking is established in a third country.	(22) Article 23 of Directive 2013/34/EU exempts parent undertakings from the obligation to prepare consolidated financial statements and a consolidated management report where those undertakings are subsidiaries of another parent undertaking that complies with that obligation unless the parent undertaking is a subsidiary undertaking from a parent undertaking that is established in a third country. It should be specified, however, that the exemption regime for consolidated financial statements and consolidated management reports operates independently from the exemption regime for consolidated sustainability reporting.

</Amend>

<Amend>Amendment <NumAm>20</NumAm>

<DocAmend>Proposal for a directive</DocAmend>

<Article>Recital 23</Article>


Text proposed by the Commission	Amendment
(23) Credit institutions and insurance undertakings play a key role in the transition towards a fully sustainable and inclusive economic and financial system in line with the European Green Deal. They can have significant positive and negative impacts via their lending, investment and underwriting activities. Credit institutions and insurance undertakings other than those that are required to comply with Directive 2013/34/EU, including cooperatives and mutual undertakings, should therefore be subject to sustainability reporting requirements provided that they meet certain size criteria. Users of that information would thus be enabled to assess both the impacts of these undertakings on society and the environment and the risks arising from sustainability matters that these undertakings could face. To ensure coherence with the reporting requirements of Council Directive 86/635/EEC50 on the annual accounts and consolidated accounts of banks and other financial institutions, sustainability reporting Member States may choose not to apply sustainability reporting requirements to credit institutions listed in Article 2(5) of Directive 2013/36/EU of the European Parliament and of the Council51 .	(23) Credit institutions and insurance undertakings play a key role in the transition towards a fully sustainable and inclusive economic and financial system in line with the European Green Deal. They can have significant positive and negative impacts via their lending, investment and underwriting activities. Credit institutions and insurance undertakings other than those that are required to comply with Directive 2013/34/EU, including cooperatives and mutual undertakings, as well as for-profit legal entities organised as trusts or under similar legal arrangements, should therefore be subject to sustainability reporting requirements provided that they meet certain size criteria. Users of that information would thus be enabled to assess both the impacts of these undertakings on society and the environment and the risks arising from sustainability matters that these undertakings could face. To ensure coherence with the reporting requirements of Council Directive 86/635/EEC50 on the annual accounts and consolidated accounts of banks and other financial institutions, sustainability reporting Member States may choose not to apply sustainability reporting requirements to credit institutions listed in Article 2(5) of Directive 2013/36/EU of the European Parliament and of the Council51 .
__________________	__________________
50 Council Directive 86/635/EEC of 8 December 1986 on the annual accounts and consolidated accounts of banks and other financial institutions (OJ L 372, 31.12.1986, p. 1).	50 Council Directive 86/635/EEC of 8 December 1986 on the annual accounts and consolidated accounts of banks and other financial institutions (OJ L 372, 31.12.1986, p. 1).
51 Directive 2013/36/EU of the European Parliament and of the Council of 26 June 2013 on access to the activity of credit institutions and the prudential supervision of credit institutions and investment firms, amending Directive 2002/87/EC and repealing Directives 2006/48/EC and 2006/49/EC (OJ L 176, 27.6.2013, p. 338).	51 Directive 2013/36/EU of the European Parliament and of the Council of 26 June 2013 on access to the activity of credit institutions and the prudential supervision of credit institutions and investment firms, amending Directive 2002/87/EC and repealing Directives 2006/48/EC and 2006/49/EC (OJ L 176, 27.6.2013, p. 338).

</Amend>

<Amend>Amendment <NumAm>21</NumAm>

<DocAmend>Proposal for a directive</DocAmend>

<Article>Recital 24</Article>


Text proposed by the Commission	Amendment
(24) The list of sustainability matters on which undertakings are required to report should be as coherent as possible with the definition of ‘sustainability factors’ laid down in Regulation (EU) 2019/2088. That list should also correspond to the needs and expectations of users and undertakings themselves, who often use the terms ‘environmental’, ‘social’ and ‘governance’ as a means to categorise the three main sustainability matters. The list of sustainability factors laid down in Regulation (EU) 2019/2088 does not explicitly include governance matters. The definition of sustainability matters in Directive 2013/34/EU should therefore be based on the definition of ‘sustainability factors’ laid down in Regulation (EU) 2019/2088, but with the addition of governance matters.	(24) The list of sustainability matters on which undertakings are required to report should be as coherent as possible with the definition of ‘sustainability factors’ laid down in Regulation (EU) 2019/2088, and prevent a mismatch of information required by data users and to be reported by data preparers. That list should also correspond to the needs and expectations of users and undertakings themselves, who often use the terms ‘environmental’, ‘social’ and ‘governance’ as a means to categorise the three main sustainability matters. The list of sustainability factors laid down in Regulation (EU) 2019/2088 does not explicitly include governance matters. The definition of sustainability matters in Directive 2013/34/EU should therefore be based on the definition, indicators and methodologies of ‘sustainability factors’ laid down in Regulation (EU) 2019/2088 and delegated acts, but with the addition of governance matters. The list is a minimum requirement, which will not lower existing national reporting requirements. The list of environmentally sustainable matters should be based on, and take account of, underlying indicators and methodologies set out in Regulation (EU) 2020/852 and in various delegated acts adopted pursuant to it, as they jointly create a classification system for environmentally sustainable economic activities.

</Amend>

<Amend>Amendment <NumAm>22</NumAm>

<DocAmend>Proposal for a directive</DocAmend>

<Article>Recital 25</Article>


Text proposed by the Commission	Amendment
(25) Articles 19a and 29a of Directive 2013/34/EU require reporting not only on information ‘to the extent necessary for an understanding of the undertaking's development, performance, position’, but also on information necessary for an understanding of the impact of the undertaking’s activities on environmental, social and employee matters, respect for human rights, anti-corruption and bribery matters. Those articles therefore require undertakings to report both on how various sustainability matters affect the undertaking, and on the impacts of the activities of the undertaking on people and the environment. That is referred to as the double-materiality perspective, in which the risks to the undertaking and the impacts of the undertaking each represent one materiality perspective. The fitness check on corporate reporting shows that those two perspectives are often not well understood or applied. It is therefore necessary to clarify that undertakings should consider each materiality perspective in its own right, and should disclose information that is material from both perspectives as well as information that is material from only one perspective.	(25) Articles 19a and 29a of Directive 2013/34/EU require reporting not only on information ‘to the extent necessary for an understanding of the undertaking's development, performance, position’, but also on information necessary for an understanding of the impact of the undertaking’s activities on environmental, climate-related, social and employee matters, respect for human rights, gender equality, anti-corruption and bribery matters. Those articles therefore require undertakings to report both on how various sustainability matters affect the undertaking, and on the impacts of the activities of the undertaking on people and the environment. That is referred to as the double-materiality perspective, in which the risks to the undertaking and the impacts of the undertaking each represent one materiality perspective. The fitness check on corporate reporting shows that those two perspectives are often not well understood or applied. It is therefore necessary to clarify that undertakings should consider each materiality perspective in its own right, and should disclose information that is material from both perspectives as well as information that is material from only one perspective, bearing in mind that double-materiality is fundamental to understanding a company’s long-term value creation.

</Amend>

<Amend>Amendment <NumAm>23</NumAm>

<DocAmend>Proposal for a directive</DocAmend>

<Article>Recital 26</Article>


Text proposed by the Commission	Amendment
(26) Articles 19a(1) and 29a(1) of Directive 2013/34/EU require undertakings to disclose information about five reporting areas: business model, policies (including due diligence processes implemented), the outcome of those policies, risks and risk management, and key performance indicators relevant to the business. Article 19a(1) of Directive 2013/34/EU does not contain explicit references to other reporting areas that users of information consider relevant, some of which align with disclosures included in international frameworks, including the recommendations of the Task Force on Climate-related Financial Disclosures. Disclosure requirements should be specified in sufficient detail to ensure that undertakings report information on their resilience to risks related to sustainability matters. In addition to the reporting areas identified in Articles 19a(1) and 29a(1) of Directive 2013/34/EU, undertakings should therefore be required to disclose information about their business strategy and the resilience of the business model and strategy to risks related to sustainability matters, any plans they may have to ensure that their business model and strategy are compatible with the transition to a sustainable and climate-neutral economy; whether and how their business model and strategy take account of the interests of stakeholders; any opportunities for the undertaking arising from sustainability matters; the implementation of the aspects of the business strategy which affect, or are affected by sustainability matters; any sustainability targets set by the undertaking and the progress made towards achieving them; the role of the board and management with regard to sustainability matters; the principal actual and potential adverse impacts connected with the undertaking’s activities; and how the undertaking has identified the information that they report on. Once the disclosure of elements such as targets and the progress towards achieving them is required, the separate requirement to disclose the outcomes of policies is no longer necessary.	(26) Articles 19a(1) and 29a(1) of Directive 2013/34/EU require undertakings to disclose information about five reporting areas: business model, policies (including due diligence processes implemented), the outcome of those policies, risks and risk management, and key performance indicators relevant to the business. Article 19a(1) of Directive 2013/34/EU does not contain explicit references to other reporting areas that users of information consider relevant, some of which align with disclosures included in international frameworks, including the recommendations of the Task Force on Climate-related Financial Disclosures. Disclosure requirements should be specified in sufficient detail to ensure that undertakings report information on their resilience to risks related to sustainability matters. In addition to the reporting areas identified in Articles 19a(1) and 29a(1) of Directive 2013/34/EU, undertakings should therefore be required to disclose information about their business strategy and the resilience of the business model and strategy to risks related to sustainability matters, any plans they may have to ensure that their business model and strategy are compatible with the transition to a sustainable and climate-neutral economy and should include information on, as appropriate, climate change mitigation and adaptation; the sustainable use and protection of water and marine and soil resources; the transition to circular economy, including resource use; pollution prevention and control; and protection and restoration of biodiversity and ecosystems; whether and how their business model and strategy take account of the interests of stakeholders, including workers, indigenous people and local communities; any opportunities for the undertaking arising from sustainability matters; the implementation of the aspects of the business strategy which affect, or are affected by sustainability matters; any science-based and time-bound short-term, mid-term and long-term sustainability targets set by the undertaking and the progress made towards achieving them; the role of the board and management with regard to sustainability matters; a description of the due diligence strategy; the actual and potential adverse impacts connected with the undertaking’s activities; and how the undertaking has identified and evaluated the information that they report on. Once the disclosure of elements such as targets and the progress towards achieving them is required, the separate requirement to disclose the outcomes of policies is no longer necessary.

</Amend>

<Amend>Amendment <NumAm>24</NumAm>

<DocAmend>Proposal for a directive</DocAmend>

<Article>Recital 27</Article>


Text proposed by the Commission	Amendment
(27) To ensure consistency with international instruments such as the UN Guiding Principles on Business and Human Rights and the OECD Due Diligence Guidance for Responsible Business Conduct, the due diligence disclosure requirements should be specified in greater detail than is the case in Article 19a(1), point (b), and Article 29a(1), point (b) of Directive 2013/34/EU. Due diligence is the process that undertakings carry out to identify, prevent, mitigate and remediate the principal actual and potential adverse impacts connected with their activities and identifies how they address those adverse impacts. Impacts connected with an undertaking’s activities include impacts directly caused by the undertaking, impacts to which the undertaking contributes, and impacts which are otherwise linked to the undertaking’s value chain. The due diligence process concerns the whole value chain of the undertaking including its own operations, its products and services, its business relationships and its supply chains. In alignment with the UN Guiding Principles on Business and Human Rights, an actual or potential adverse impact is to be considered principal where it measures among the greatest impacts connected with the undertaking’s activities based on: the gravity of the impact on people or the environment; the number of individuals that are or could be affected, or the scale of damage to the environment; and the ease with which the harm could be remediated, restoring the environment or affected people to their prior state.	(27) To ensure consistency with international instruments such as the UN Guiding Principles on Business and Human Rights and the OECD Due Diligence Guidance for Responsible Business Conduct and the ILO Tripartite Declaration of Principles concerning Multinational Enterprises and Social Policy, the due diligence disclosure requirements should be specified in greater detail than is the case in Article 19a(1), point (b), and Article 29a(1), point (b) of Directive 2013/34/EU. Due diligence is the process that undertakings carry out to identify, track, prevent, mitigate, cease and remediate the principal actual and potential adverse impacts connected with their activities and identifies how they address those adverse impacts. Impacts connected with an undertaking’s activities include impacts directly caused by the undertaking, impacts to which the undertaking contributes, and impacts which are otherwise linked to the undertaking’s value chain. The due diligence process concerns the whole value chain of the undertaking including its own operations, its products and services, its business relationships and its supply chains. In alignment with the UN Guiding Principles on Business and Human Rights, an actual or potential impact is to be considered adverse based on: the gravity of the impact on people or the environment; the number of individuals that are or could be affected, or the scale of damage to the environment; and the ease with which the harm could be remediated, restoring the environment or affected people to their prior state.

</Amend>

<Amend>Amendment <NumAm>25</NumAm>

<DocAmend>Proposal for a directive</DocAmend>

<Article>Recital 28</Article>


Text proposed by the Commission	Amendment
(28) Directive 2013/34/EU does not require the disclosure of information on intangibles other than intangible assets recognised in the balance sheet. It is widely recognised that information on intangible assets and other intangible factors, including internally-generated intangibles, is underreported, impeding the proper assessment of an undertaking’s development, performance and position and monitoring of investments. To enable investors to better understand the increasing gap between the accounting book value of many undertakings and their market valuation, which is observed in many sectors of the economy, adequate reporting on intangibles should be required. It is therefore necessary to require undertakings to disclose information on intangibles other than intangible assets recognised in the balance sheet, including intellectual capital, human capital, including skills development, and social and relationship capital, including reputation capital. Information on intangibles should also include information related to research and development.	(28) Directive 2013/34/EU does not require the disclosure of information on intangibles other than intangible assets recognised in the balance sheet. It is widely recognised that information on intangible assets and other intangible factors, including internally-generated intangibles, is underreported, impeding the proper assessment of an undertaking’s development, performance and position and monitoring of investments. To enable investors to better understand the increasing gap between the accounting book value of many undertakings and their market valuation, which is observed in many sectors of the economy, adequate reporting on intangibles should be required. It is therefore necessary to require undertakings to disclose relevant information on intangibles that are consistent with intangibles reported in the financial statement, including when material on intellectual capital, human capital, including skills development, and social and relationship capital, including reputation capital. Information on intangibles should also include information related to research and development.

</Amend>

<Amend>Amendment <NumAm>26</NumAm>

<DocAmend>Proposal for a directive</DocAmend>

<Article>Recital 29</Article>


Text proposed by the Commission	Amendment
(29) Articles 19a(1) and 29a(1) of Directive 2013/34/EU do not specify whether the information to be reported is to be forward looking or information about past performance. There is currently a lack of forward-looking disclosures, which users of sustainability information especially value. Articles 19a and 29a of Directive 2013/34/EU should therefore specify that the sustainability information reported shall include forward-looking and retrospective, and both qualitative and quantitative information. Reported sustainability information should also take into account short, medium and long-term time horizons and contain information about the undertaking’s whole value chain, including its own operations, its products and services, its business relationships, and its supply chain, as appropriate. Information about the undertaking’s whole value chain would include information related to its value chain within the EU and information that covers third countries if the undertaking’s value chain extends outside the EU.	(29) Articles 19a(1) and 29a(1) of Directive 2013/34/EU do not specify whether the information to be reported is to be forward looking or information about past performance. There is currently a lack of forward-looking disclosures, which users of sustainability information especially value. Articles 19a and 29a of Directive 2013/34/EU should therefore specify that the sustainability information reported shall include forward-looking and retrospective, and both qualitative and quantitative information that is based on science-based, harmonised, comparable and uniform indicators, while not endangering the commercial position of the undertaking. Reported sustainability information should also take into account short, medium and long-term time horizons and contain information about the undertaking’s whole value chain, including its own operations, its products and services, its business relationships, and its supply chain, as appropriate. Information about the undertaking’s whole value chain would include information related to its value chain within the EU and information that covers third countries if the undertaking’s value chain extends outside the EU. The Commission should help businesses and prepare non-binding guidelines on appropriate methodologies to generate the forward-looking information to be provided in the reporting.

</Amend>

<Amend>Amendment <NumAm>27</NumAm>

<DocAmend>Proposal for a directive</DocAmend>

<Article>Recital 29 a (new)</Article>


Text proposed by the Commission	Amendment
	(29a) For reporting purposes, Articles 19a(1) and 29a(1) of Directive 2013/34/EU should not require undertakings to publish confidential information, in accordance with Directive (EU) 2016/943 of the European Parliament and of the Council of 8 June 2016 on the protection of undisclosed know-how and business information (Trade Secrets Directive).

</Amend>

<Amend>Amendment <NumAm>28</NumAm>

<DocAmend>Proposal for a directive</DocAmend>

<Article>Recital 32</Article>


Text proposed by the Commission	Amendment
(32) Undertakings under the scope of Articles 19a(1) and 29a(1) of Directive 2013/34/EU may rely on national, Union-based or international reporting frameworks, and where they do so, they have to specify which frameworks they relied upon. However, Directive 2013/34/EU does not require undertakings to use a common reporting framework or standard, and it does not prevent undertakings from choosing not to use any reporting framework or standards at all. As required by Article 2 of Directive 2014/95/EU, the Commission published in 2017 non-binding guidelines for undertakings under the scope of that Directive52 . In 2019, the Commission published additional guidelines, specifically on reporting climate-related information53 . The climate reporting guidelines explicitly incorporated the recommendations of the Task Force on Climate-related Financial Disclosures. Available evidence indicates that those non-binding guidelines did not have a significant impact on the quality of non-financial reporting by undertakings under the scope of Articles 19a and 29a of Directive 2013/34/EU. The voluntary nature of the guidelines means that undertakings are free to apply them or not. The guidelines can therefore not ensure on their own the comparability of information disclosed by different undertakings or the disclosure of all information that users consider relevant. That is why there is a need for mandatory common reporting standards to ensure that information is comparable and that all relevant information is disclosed. Building on the double-materiality principle, standards should cover all information that is material to users. Common reporting standards are also necessary to enable the audit and digitalisation of sustainability reporting and to facilitate its supervision and enforcement. The development of mandatory common sustainability reporting standards is necessary to progress to a situation in which sustainability information has a status comparable to that of financial information.	(32) Undertakings under the scope of Articles 19a(1) and 29a(1) of Directive 2013/34/EU may rely on national, Union-based or international reporting frameworks, and where they do so, they have to specify which frameworks they relied upon. However, Directive 2013/34/EU does not require undertakings to use a common reporting framework or standard, and it does not prevent undertakings from choosing not to use any reporting framework or standards at all. As required by Article 2 of Directive 2014/95/EU, the Commission published in 2017 non-binding guidelines for undertakings under the scope of that Directive52 . In 2019, the Commission published additional guidelines, specifically on reporting climate-related information53 . The climate reporting guidelines explicitly incorporated the recommendations of the Task Force on Climate-related Financial Disclosures. Available evidence indicates that those non-binding guidelines did not have a significant impact on the quality of non-financial reporting by undertakings under the scope of Articles 19a and 29a of Directive 2013/34/EU. The voluntary nature of the guidelines means that undertakings are free to apply them or not. The guidelines can therefore not ensure on their own the comparability, reliability and sincerity of the information disclosed by different undertakings or the disclosure of all information that users consider relevant. That is why there is a need for mandatory common reporting standards to ensure that information is comparable, reliable and sincere and that all relevant information is disclosed. Building on the double-materiality principle, standards should cover all information that is material to users. Common reporting standards are also necessary to enable the audit and digitalisation of sustainability reporting and to facilitate its supervision and enforcement. The development of mandatory common sustainability reporting standards is necessary to progress to a situation in which sustainability information has a status comparable to that of financial information. When defining such standards, it is essential to givedue consideration to the main sustainability reporting standards used worldwidetoday.
__________________	__________________
52 Communication from the Commission Guidelines on non-financial reporting (methodology for reporting non-financial information) (C/2017/4234).	52 Communication from the Commission Guidelines on non-financial reporting (methodology for reporting non-financial information) (C/2017/4234).
53 Communication from the Commission Guidelines on non-financial reporting: Supplement on reporting climate-related information (C/2019/4490).	53 Communication from the Commission Guidelines on non-financial reporting: Supplement on reporting climate-related information (C/2019/4490).

</Amend>

<Amend>Amendment <NumAm>29</NumAm>

<DocAmend>Proposal for a directive</DocAmend>

<Article>Recital 33</Article>


Text proposed by the Commission	Amendment
(33) No existing standard or framework satisfies the Union’s needs for detailed sustainability reporting by itself. Information required by Directive 2013/34/EU needs to cover information relevant from each of the materiality perspectives, needs to cover all sustainability matters and needs to be aligned, where appropriate, with other obligations under Union law to disclose sustainability information, including obligations laid down in Regulation (EU) 2020/852 and Regulation (EU) 2019/2088. In addition, mandatory sustainability reporting standards for Union undertakings must be commensurate with the level of ambition of the European Green Deal and the Union’s climate-neutrality objective for 2050. It is therefore necessary to empower the Commission to adopt Union sustainability reporting standards, enabling their rapid adoption and ensuring that the content of sustainability reporting standards are consistent with the Union’s needs.	(33) No existing standard or framework satisfies the Union’s needs for detailed sustainability reporting by itself. Information required by Directive 2013/34/EU needs to cover information relevant from each of the materiality perspectives, needs to cover all sustainability matters and needs to be aligned, including with obligations laid down in Regulation (EU) 2020/852 and Regulation (EU) 2019/2088 and with the EU acquis. This information must be based on science-based, harmonised, comparable and uniform indicators. In addition, mandatory sustainability reporting standards for Union undertakings must be commensurate with the level of ambition of the European Green Deal and the Union’s climate-neutrality objective for 2050 as well as intermediate targets under Regulation (EU) 2021/1119. It is therefore necessary to empower the Commission to adopt Union sustainability reporting standards, enabling their rapid adoption and ensuring that the content of sustainability reporting standards are consistent with the Union’s needs, while ensuring consistency with international standards.

</Amend>

<Amend>Amendment <NumAm>30</NumAm>

<DocAmend>Proposal for a directive</DocAmend>

<Article>Recital 34</Article>


Text proposed by the Commission	Amendment
(34) The European Financial Reporting Advisory Group (EFRAG) is a non-profit association established under Belgian law that serves the public interest by providing advice to the Commission on the endorsement of international financial reporting standards. EFRAG has established a reputation as a European centre of expertise on corporate reporting, and is well placed to foster coordination between European sustainability reporting standards and international initiatives that seek to develop standards that are consistent across the world. In March 2021, a multi-stakeholder task force set up by EFRAG published recommendations for the possible development of sustainability reporting standards for the European Union. Those recommendations contain proposals to develop a coherent and comprehensive set of reporting standards, covering all sustainability matters from a double-materiality perspective. Those recommendations also contain a detailed roadmap for developing such standards, and proposals for mutually reinforcing cooperation between global standard-setting initiatives and standard-setting initiatives of the European Union. In March 2021, the EFRAG President published recommendations for possible governance changes to EFRAG if it were to be asked to develop technical advice about sustainability reporting standards. These recommendations include offsetting up within EFRAG a new sustainability reporting pillar while not significantly modifying the existing financial reporting pillar. When adopting sustainability reporting standards, the Commission should take account of technical advice that EFRAG will develop. In order to ensure high-quality standards that contribute to the European public good and meet the needs of undertakings and of users of the information reported, EFRAG’s technical advice should be developed with proper due process, public oversight and transparency, accompanied by cost benefit analyses, and be developed with the expertise of relevant stakeholders. To ensure that Union sustainability reporting standards take account of the views of the Member States of the Union, before adopting the standards the Commission should consult the Member State Expert Group on Sustainable Finance referred to in Article 24 of Regulation (EU) 2020/852 on EFRAG’s technical advice. The European Securities and Markets Authority (ESMA) plays a role in drafting regulatory technical standards pursuant to Regulation (EU) 2019/2088 and there needs to be coherence between those regulatory technical standards and sustainability reporting standards. According to Regulation (EU) No 1095/2010 of the European Parliament and of the Council54 , ESMA also plays a role in promoting supervisory converge in the enforcement of corporate reporting by issuers whose securities are listed on EU regulated markets and who will be required to use these sustainability reporting standards. Therefore, ESMA should be required to provide an opinion on EFRAG’s technical advice. This opinion should be provided within two months from the date of receipt of the request from the Commission. In addition, the Commission should consult the European Banking Authority, the European Insurance and Occupational Pensions Authority, the European Environment Agency, the European Union Agency for Fundamental Rights, the European Central Bank, the Committee of European Auditing Oversight Bodies and the Platform on Sustainable Finance to ensure that the sustainability reporting standards are coherent with relevant Union policy and legislation. Where any of those bodies decide to submit an opinion, they shall do so within two months from the date of being consulted by the Commission.	(34) The European Financial Reporting Advisory Group (EFRAG) is a non-profit association established under Belgian law that serves the public interest by providing advice to the Commission on the endorsement of international financial reporting standards. EFRAG has established a reputation as a European centre of expertise on corporate reporting, and is well placed to foster coordination between European sustainability reporting standards and international initiatives that seek to develop standards that are consistent across the world. In March 2021, a multi-stakeholder task force set up by EFRAG published recommendations for the possible development of sustainability reporting standards for the European Union. Those recommendations contain proposals to develop a coherent and comprehensive set of reporting standards, covering all sustainability matters from a double-materiality perspective. Those recommendations also contain a detailed roadmap for developing such standards, and proposals for mutually reinforcing cooperation between global standard-setting initiatives and standard-setting initiatives of the European Union. In March 2021, the EFRAG President published recommendations for possible governance changes to EFRAG if it were to be asked to develop technical advice about sustainability reporting standards. These recommendations include offsetting up within EFRAG a new sustainability reporting pillar while not significantly modifying the existing financial reporting pillar. In January 2022, EFRAG announced the membership of several civil society organisations and hopes to enable a broader representation of all relevant sustainability reporting stakeholders. When adopting sustainability reporting standards, the Commission should take account of technical advice that EFRAG will develop. In order to ensure that EFRAG has sufficient independence from private funding contributions to its budget while being sufficiently equipped to develop high quality standard recommendations, the Commission should increase its funding to at least 75% of the work on sustainability issues in relative and absolute share. In order to ensure high-quality standards that contribute to the European public good and meet the needs of undertakings and of users of the information reported, EFRAG’s technical advice should be developed with proper due process, public oversight and transparency, accompanied by cost benefit analyses, and be developed with the expertise of a balanced representation relevant stakeholders, including social partners, NGOs and consumer organisations, who should be able to participate in the standard setting process on equal footing. Participation in the independent technical advisory group shall be based on expertise on matters outlined in articles 19a and 19b and shall not be conditional to any financial contribution. The Commission should guarantee a transparent process avoiding any risk of conflict of interest, as well as the full inclusion in the development of sustainability reporting standards of trade unions, consumer organisations, NGOs and all other relevant stakeholders, such as international organisations or governments from countries where the undertaking or its value and supply chain will operate, in order to represent the interests of all groups of users. To ensure that Union sustainability reporting standards take account of the views of the Member States of the Union, before adopting the standards the Commission should consult the Member State Expert Group on Sustainable Finance referred to in Article 24 of Regulation (EU) 2020/852 on EFRAG’s technical advice. The European Securities and Markets Authority (ESMA) plays a role in drafting regulatory technical standards pursuant to Regulation (EU) 2019/2088 and there needs to be coherence between those regulatory technical standards and sustainability reporting standards. According to Regulation (EU) No 1095/2010 of the European Parliament and of the Council54 , ESMA also plays a role in promoting supervisory converge in the enforcement of corporate reporting by issuers whose securities are listed on EU regulated markets and who will be required to use these sustainability reporting standards. Therefore, ESMA should be required to provide an opinion on EFRAG’s technical advice. This opinion should be provided within two months from the date of receipt of the request from the Commission. In addition, the Commission should consult the European Banking Authority, the European Insurance and Occupational Pensions Authority, the European Environment Agency, the European Union Agency for Fundamental Rights, the European Central Bank, the Committee of European Auditing Oversight Bodies and the Platform on Sustainable Finance to ensure that the sustainability reporting standards are coherent with relevant Union policy and legislation. Where any of those bodies decide to submit an opinion, they shall do so within two months from the date of being consulted by the Commission.
__________________	__________________
54 Regulation (EU) No 1095/2010 of the European Parliament and of the Council of 24 November 2010 establishing a European Supervisory Authority (European Securities and Markets Authority), amending Decision No 716/2009/EC and repealing Commission Decision 2009/77/EC (OJ L 331, 15.12.2010, p. 84).	54 Regulation (EU) No 1095/2010 of the European Parliament and of the Council of 24 November 2010 establishing a European Supervisory Authority (European Securities and Markets Authority), amending Decision No 716/2009/EC and repealing Commission Decision 2009/77/EC (OJ L 331, 15.12.2010, p. 84).

</Amend>

<Amend>Amendment <NumAm>31</NumAm>

<DocAmend>Proposal for a directive</DocAmend>

<Article>Recital 34 a (new)</Article>


Text proposed by the Commission	Amendment
	(34 a) Every year the Commission should consult and associate the relevant Council working groups and European Parliament committees on the EFRAG working programme. In order to foster democratic control, parliamentary scrutiny and transparency, regular exchanges should be held between EFRAG and the relevant European Parliament committees.

</Amend>

<Amend>Amendment <NumAm>32</NumAm>

<DocAmend>Proposal for a directive</DocAmend>

<Article>Recital 35</Article>


Text proposed by the Commission	Amendment
(35) Sustainability reporting standards should be coherent with other Union legislation. Those standards should in particular be aligned with the disclosure requirements laid down in Regulation (EU) 2019/2088, and they should take account of underlying indicators and methodologies set out in the various delegated acts adopted pursuant to Regulation (EU) 2020/852, disclosure requirements applicable to benchmark administrators pursuant to Regulation (EU) 2016/1011 of the European Parliament and of the Council55 , the minimum standards for the construction of EU climate transition benchmarks and EU Paris-aligned benchmarks; and of any work carried out by the European Banking Authority in the implementation of the Pillar III disclosure requirements of Regulation (EU) No 575/2013. Standards should take account of Union environmental legislation, including Directive 2003/87/EC of the European Parliament and of the Council56 and Regulation (EC) No 1221/2009 of the European Parliament and of the Council57 , and should take account of Commission Recommendation 2013/179/EU58 and its annexes, and their updates. Other relevant Union legislation, including Directive 2010/75/EU of the European Parliament and of the Council59 , and requirements laid down in Union law for undertakings as regards directors’ duties and due diligence, should also be taken into account.	(35) Sustainability reporting standards should be coherent with other Union legislation. Those standards should in particular be aligned with the disclosure requirements laid down in Regulation (EU) 2019/2088, and they should be consistent with the underlying indicators and methodologies set out in the various delegated acts adopted pursuant to Regulation (EU) 2020/852, disclosure requirements applicable to benchmark administrators pursuant to Regulation (EU) 2016/1011 of the European Parliament and of the Council55 , the minimum standards for the construction of EU climate transition benchmarks and EU Paris-aligned benchmarks; and of any work carried out by the European Banking Authority in the implementation of the Pillar III disclosure requirements of Regulation (EU) No 575/2013. Standards should take account of Union environmental legislation, including Directive 2003/87/EC of the European Parliament and of the Council56 and Regulation (EC) No 1221/2009 of the European Parliament and of the Council57 , and should take account of Commission Recommendation 2013/179/EU58 and its annexes, and their updates. Other relevant Union legislation, including Directive 2010/75/EU of the European Parliament and of the Council59 , and requirements laid down in Union law for undertakings as regards directors’ duties and due diligence, should also be taken into account.
__________________	__________________
55 Regulation (EU) 2016/1011 of the European Parliament and of the Council of 8 June 2016 on indices used as benchmarks in financial instruments and financial contracts or to measure the performance of investment funds and amending Directives 2008/48/EC and 2014/17/EU and Regulation (EU) No 596/2014 (OJ L 171, 29.6.2016, p. 1).	55 Regulation (EU) 2016/1011 of the European Parliament and of the Council of 8 June 2016 on indices used as benchmarks in financial instruments and financial contracts or to measure the performance of investment funds and amending Directives 2008/48/EC and 2014/17/EU and Regulation (EU) No 596/2014 (OJ L 171, 29.6.2016, p. 1).
56 Directive 2003/87/EC of the European Parliament and of the Council of 13 October 2003 establishing a scheme for greenhouse gas emission allowance trading within the Community and amending Council Directive 96/61/EC (OJ L 275, 25.10.2003, p. 32).	56 Directive 2003/87/EC of the European Parliament and of the Council of 13 October 2003 establishing a scheme for greenhouse gas emission allowance trading within the Community and amending Council Directive 96/61/EC (OJ L 275, 25.10.2003, p. 32).
57 Regulation (EC) No 1221/2009 of the European Parliament and of the Council of 25 November 2009 on the voluntary participation by organisations in a Community eco-management and audit scheme (EMAS), repealing Regulation (EC) No 761/2001 and Commission Decisions 2001/681/EC and 2006/193/EC (OJ L 342, 22.12.2009, p. 1).	57 Regulation (EC) No 1221/2009 of the European Parliament and of the Council of 25 November 2009 on the voluntary participation by organisations in a Community eco-management and audit scheme (EMAS), repealing Regulation (EC) No 761/2001 and Commission Decisions 2001/681/EC and 2006/193/EC (OJ L 342, 22.12.2009, p. 1).
58 Commission Recommendation 2013/179/EU of 9 April 2013 on the use of common methods to measure and communicate the life cycle environmental performance of products and organisations (OJ L 124, 4.5.2013, p. 1).	58 Commission Recommendation 2013/179/EU of 9 April 2013 on the use of common methods to measure and communicate the life cycle environmental performance of products and organisations (OJ L 124, 4.5.2013, p. 1).
59 Directive 2010/75/EU of the European Parliament and of the Council of 24 November 2010 on industrial emissions (integrated pollution prevention and control) (OJ L 334, 17.12.2010, p. 17).	59 Directive 2010/75/EU of the European Parliament and of the Council of 24 November 2010 on industrial emissions (integrated pollution prevention and control) (OJ L 334, 17.12.2010, p. 17).

</Amend>

<Amend>Amendment <NumAm>33</NumAm>

<DocAmend>Proposal for a directive</DocAmend>

<Article>Recital 36</Article>


Text proposed by the Commission	Amendment
(36) Sustainability reporting standards should take account of the Commission guidelines on non-financial reporting60 and the Commission guidelines on reporting climate-related information61 . They should also take account of other reporting requirements in Directive 2013/34/EU not directly related to sustainability, with the aim of providing the users of the reported information with a better understanding of the development, performance, position and impact of the undertaking, by maximising the links between the sustainability information and other information reported in accordance with Directive 2013/34/EU.	(36) Sustainability reporting standards should take account of the Commission guidelines on non-financial reporting60 and the Commission guidelines on reporting climate-related information, including the KPIs of these guidelines61 . They should also take account of other reporting requirements in Directive 2013/34/EU not directly related to sustainability, with the aim of providing the users of the reported information with a better understanding of the development, performance, position and impact of the undertaking, by maximising the links between the sustainability information and other information reported in accordance with Directive 2013/34/EU.
__________________	__________________
60 2017/C 215/01.	60 2017/C 215/01.
61 2019/C 209/01.	61 2019/C 209/01.

</Amend>

<Amend>Amendment <NumAm>34</NumAm>

<DocAmend>Proposal for a directive</DocAmend>

<Article>Recital 37</Article>


Text proposed by the Commission	Amendment
(37) Sustainability reporting standards should be proportionate, and should not impose unnecessary administrative burden on companies that are required to use them. In order to minimise disruption for undertakings that already report sustainability information, sustainability reporting standards should take account of existing standards and frameworks for sustainability reporting and accounting where appropriate. Those include the Global Reporting Initiative, the Sustainability Accounting Standards Board, the International Integrated Reporting Council, the International Accounting Standards Board, the Task Force on Climate-related Financial Disclosures, the Carbon Disclosure Standards Board, and CDP (formerly the Carbon Disclosure Project). Standards of the European Union should take account of any sustainability reporting standards developed under the auspices of International Financial Reporting Standards Foundation. To avoid unnecessary regulatory fragmentation that may have negative consequences for undertakings operating globally, European standards should contribute to the process of convergence of sustainability reporting standards at global level.	(37) Sustainability reporting standards should be proportionate, and should not impose unnecessary administrative burden on companies that are required to use them. In order to minimise disruption for undertakings that already report sustainability information, sustainability reporting standards should take account of be consistent with existing standards and frameworks for sustainability reporting and accounting where appropriate. Those include the Global Reporting Initiative, the Sustainability Accounting Standards Board, the International Integrated Reporting Council, the International Accounting Standards Board, the Task Force on Climate-related Financial Disclosures, the Carbon Disclosure Standards Board, and CDP (formerly the Carbon Disclosure Project) and the greenhouse gases Protocol in the calculation of greenhouse gases emissions, including scope 1, 2 and 3 from undertakings from undertakings, and including emissions generated from industrial livestock production. Standards of the European Union should take account of any sustainability reporting standards developed under the auspices of International Financial Reporting Standards Foundation. To avoid unnecessary regulatory fragmentation that may have negative consequences for undertakings operating globally, European standards should contribute to the process of convergence of sustainability reporting standards at global level by supporting the work of the International Sustainability Standards Board (ISSB).

</Amend>

<Amend>Amendment <NumAm>35</NumAm>

<DocAmend>Proposal for a directive</DocAmend>

<Article>Recital 40</Article>


Text proposed by the Commission	Amendment
(40) It should be ensured that the information reported by undertakings in accordance with the sustainability reporting standards meet the needs of users. The reporting standards should therefore specify the information that undertakings are to disclose on all major environmental factors, including their impacts and dependencies on climate, air, land, water and biodiversity. Regulation (EU) 2020/852 provides a classification of the environmental objectives of the Union. For reasons of coherence, it is appropriate to use a similar classification to identify the environmental factors that should be addressed by sustainability reporting standards. The reporting standards should consider and specify any geographical or other contextual information that undertakings should disclose to provide an understanding of their principal impacts on sustainability matters and the principal risks to the undertaking arising from sustainability matters.	(40) It should be ensured that the information reported by undertakings in accordance with the sustainability reporting standards meet the needs of users and do not place a disproportionate burden in effort and costs on those reporting. The reporting standards should therefore specify the information that undertakings are to disclose on all major environmental factors, including their impacts and dependencies on climate, air, land, water and biodiversity. Regulation (EU)2020/852 provides a classification of the environmental objectives of the Union. For reasons of coherence, it is appropriate to use a similar classification to identify the environmental factors that should be addressed by sustainability reporting standards. The reporting standards should consider and specify any geographical or other contextual information that undertakings should disclose to provide an understanding of their principal impacts on sustainability matters and the principal risks to the undertaking arising from sustainability matters. When specifying the information about environmental factors that undertakings are to disclose, coherence should be ensured with the definitions in Article 2 and the reporting requirements of Article 8 in Regulation (EU) 2020/852 and the delegated acts adopted pursuant to that Regulation.

</Amend>

<Amend>Amendment <NumAm>36</NumAm>

<DocAmend>Proposal for a directive</DocAmend>

<Article>Recital 41</Article>


Text proposed by the Commission	Amendment
(41) With regard to climate-related information, users are interested in knowing about undertakings’ physical and transition risks, and about their resilience to different climate scenarios. They are also interested in the level and scope of greenhouse gas emissions and removals attributed to the undertaking, including the extent to which the undertaking uses offsets and the source of those offsets. Achieving a climate neutral economy requires the alignment of greenhouse gas accounting and offset standards. Users need reliable information regarding offsets that addresses concerns regarding possible double-counting and overestimations, given the risks to the achievement of climate-related targets that double-counting and overestimations can create. The reporting standards should therefore specify the information undertakings should report with regard to those matters.	(41) With regard to climate-related information, users, including consumers, are interested in knowing about undertakings’ physical and transition risks, and about their resilience and plans to adapt to different climate scenarios and to the EU’s climate neutrality goal. They are also interested in the level and scope of greenhouse gas emissions and removals attributed to the undertaking, including the extent to which the undertaking uses offsets and the source of those offsets. Achieving a climate neutral economy requires the alignment of greenhouse gas accounting and offset standards. Users need reliable information regarding offsets that addresses concerns regarding possible double-counting and over estimations, given the risks to the achievement of climate-related targets that double-counting and overestimations can create. These parties are also interested to know the efforts made by companies to effectively reduce absolute GHG emissions as part of their climate mitigation and adaption strategies. The reporting standards should therefore specify the information undertakings should report with regard to those matters.

</Amend>

<Amend>Amendment <NumAm>37</NumAm>

<DocAmend>Proposal for a directive</DocAmend>

<Article>Recital 42</Article>


Text proposed by the Commission	Amendment
(42) Achieving a climate neutral and circular economy and a toxic-free environment requires the full mobilisation of all economic sectors. Reducing energy use and increasing energy efficiency is key in this respect as energy is used across supply chains. Energy aspects should therefore be duly considered in sustainability reporting standards, in particular in relation to environmental matters.	(42) Achieving a climate neutral and circular economy without diffuse pollution requires the full mobilisation of all economic sectors. Reducing energy use and increasing energy efficiency is key in this respect as energy is used across supply chains. Energy aspects should therefore be duly considered in sustainability reporting standards, in particular in relation to environmental and climate related matters.

</Amend>

<Amend>Amendment <NumAm>38</NumAm>

<DocAmend>Proposal for a directive</DocAmend>

<Article>Recital 43</Article>


Text proposed by the Commission	Amendment
(43) Sustainability reporting standards should specify the information that undertakings should disclose on social factors, including employee factors and human rights. Such information should cover the impacts of undertakings on people, including on human health. The information that undertakings disclose about human rights should include information about forced labour in their value chains where relevant. Reporting standards that address social factors should specify the information that undertakings should disclose with regard to the principles of the European Pillar of Social Rights that are relevant to businesses, including equal opportunities for all and working conditions. The European Pillar of Social Rights Action Plan adopted in March 2021 calls for stronger requirements on undertakings to report on social issues. The reporting standards should also specify the information that undertakings should disclose with regard to the human rights, fundamental freedoms, democratic principles and standards established in the International Bill of Human Rights and other core UN human rights conventions, the International Labour Organization’s Declaration on Fundamental Principles and Rights at Work, the fundamental conventions of the International Labour Organisation, and the Charter of Fundamental Rights of the European Union.	(43) Sustainability reporting standards should specify the information that undertakings should disclose on social factors, including working conditions, workers' rights, social partner involvement, collective bargaining, equality, non-discrimination, prevention of workplace violence and harassment diversity and inclusion, and human rights. Such information should be disclosed country-by country, where relevant, in close consultation with trade unions and workers’ representatives and cover the impacts of undertakings on its workers, people and on human health. Where the administrative or management body of the undertaking receives an opinion on the sustainability report from the representatives of workers, it should append that opinion to the sustainability report, if that is provided for under national law and practices. The information that undertakings disclose about human rights should include information about forced labour and child labour in their value chains where relevant. Reporting requirements on forced labour should not replace the public authorities’ responsibility to address the import of goods, produced as a result of human rights abuses, including forced labour, through trade policy and diplomatic means. Undertakings should also be able to report on possible risks and negative trends regarding employment and incomes, due to the absence of a just transition process. Reporting standards that address social factors should specify the information that undertakings should disclose with regard to the 20 principles of the European Pillar of Social Rights, particularly equal opportunities for all and fair working conditions. The European Pillar of Social Rights Action Plan adopted in March 2021 calls for stronger requirements on undertakings to report on social issues. The reporting standards should also specify the information that undertakings should disclose with regard to the human rights, fundamental freedoms, democratic principles and standards established in the International Bill of Human Rights and other core UN human rights conventions, including the UN Convention on the Rights of Persons with Disabilities, the UN Declaration on the Rights of Indigenous Peoples, the UN Convention on the Rights of the Child, the International Labour Organization’s Declaration on Fundamental Principles and Rights at Work, the fundamental conventions of the International Labour Organisation, the International Labour Organization's Tripartite Declaration of Principles concerning Multinational Enterprises and Social Policy, including the list of relevant standards under its Annex I, the European Convention of Human Rights, the (revised) European Social Charter, the Charter of Fundamental Rights of the European Union and the OECD Guidelines for Multinational Enterprises. Reporting carried out on social factors should be proportionate to the scope and the goals of this Directive.

</Amend>

<Amend>Amendment <NumAm>39</NumAm>

<DocAmend>Proposal for a directive</DocAmend>

<Article>Recital 44</Article>


Text proposed by the Commission	Amendment
(44) Users need information about governance factors, including information on the role of an undertaking’s administrative, management and supervisory bodies, including with regard to sustainability matters, the composition of such bodies, and an undertaking’s internal control and risk management systems, including in relation to the reporting process. Users also need information about undertakings’ corporate culture and approach to business ethics, including anti-corruption and anti-bribery, and about their political engagements, including lobbying activities. Information about the management of the undertaking and the quality of relationships with business partners, including payment practices relating to the date or period for payment, the rate of interest for late payment or the compensation for recovery costs referred to in Directive 2011/7/EU of the European Parliament and of the Council62 on late payment in commercial transactions, helps users to understand an undertaking’s risks as well as its impacts on sustainability matters. Every year, thousands of businesses, especially SMEs, suffer administrative and financial burdens because they are paid late, or not at all. Ultimately, late payments lead to insolvency and bankruptcy, with destructive effects on entire value chains. Increasing information about payment practices should empower other undertakings to identify prompt and reliable payers, detect unfair payment practices, access information about the businesses they trade with, and negotiate fairer payment terms.	(44) Users need information about governance factors, including information on the role of an undertaking’s administrative,management and supervisory bodies and committees, including with regard to sustainability matters, the composition of those, particularly with regard to workers' and women's participation and gender balance and whether the company has a policy in terms of incentives offered to members of these bodies which are linked to sustainability matters, , and an undertaking’s internal control and risk management systems, including in relation to the reporting process. Users also need information about undertakings’ corporate culture and approach to business ethics, including anti-corruption and anti-bribery, and about their political engagements, including lobbying activities. Information about the management of the undertaking and the quality of relationships with business partners, including payment practices relating to the date or period for payment, the rate of interest for late payment or the compensation for recovery costs referred to in Directive 2011/7/EU of the European Parliament and of the Council62 on late payment in commercial transactions, helps users to understand an undertaking’s risks as well as its impacts on sustainability matters. Every year, thousands of businesses, especially SMEs, suffer administrative and financial burdens because they are paid late, or not at all. Ultimately, late payments lead to insolvency and bankruptcy, with destructive effects on entire value chains. Increasing information about payment practices should empower other undertakings to identify prompt and reliable payers, detect unfair payment practices, access information about the businesses they trade with, and negotiate fairer payment terms.
__________________	__________________
62 Directive 2011/7/EU of the European Parliament and of the Council of 16 February 2011 on combating late payment in commercial transactions (OJ L 48, 23.2.2011, p. 1).	62 Directive 2011/7/EU of the European Parliament and of the Council of 16 February 2011 on combating late payment in commercial transactions (OJ L 48, 23.2.2011, p. 1).

</Amend>

<Amend>Amendment <NumAm>40</NumAm>

<DocAmend>Proposal for a directive</DocAmend>

<Article>Recital 44 a (new)</Article>


Text proposed by the Commission	Amendment
	(44 a) Diversity on company boards contributes to better decision-making, corporate governance and resilience in undertakings. Workers' representatives as well as more women on boards would promote the sustainable development of undertakings.

</Amend>

<Amend>Amendment <NumAm>41</NumAm>

<DocAmend>Proposal for a directive</DocAmend>

<Article>Recital 45 a (new)</Article>


Text proposed by the Commission	Amendment
	(45 a) Member States should ensure that sustainability reporting is done in compliance with workers’ rights to information and consultation, including when it comes to take part in the design of the reporting system in close relation with administrative, management or supervisory bodies.

</Amend>

<Amend>Amendment <NumAm>42</NumAm>

<DocAmend>Proposal for a directive</DocAmend>

<Article>Recital 47</Article>


Text proposed by the Commission	Amendment
(47) To meet the information needs from users in a timely manner, and in particular given the urgency to meet the information needs of financial market participants subject to the requirements laid down in the delegated acts adopted pursuant to Article 4, paragraphs 6 and 7 of Regulation (EU) 2019/2088, the Commission should adopt a first set of reporting standards by 31 October 2022. That set of reporting standards should specify the information that undertakings should disclose with regard to all reporting areas and sustainability matters, and that financial market participants need to comply with the disclosure obligations laid down in Regulation (EU) 2019/2088. The Commission should adopt a second set of reporting standards at the latest by 31 October 2023, specifying complementary information that undertakings should disclose about sustainability matters and reporting areas where necessary, and information that is specific to the sector in which an undertaking operates. The Commission should review the standards every 3 years to take account of relevant developments, including the development of international standards.	(47) To meet the information needs from users in a timely manner, and in particular given the urgency to meet the information needs of financial market participants subject to the requirements laid down in the delegated acts adopted pursuant to Article 4, paragraphs 6 and 7 of Regulation (EU) 2019/2088, the Commission should adopt a first set of reporting standards by 30 April 2023. That set of reporting standards should specify the information that undertakings should disclose with regard to all reporting areas and sustainability matters, and that financial market participants need to comply with the disclosure obligations laid down in Regulation (EU) 2019/2088. To comply with those disclosure obligations, financial market participants should be given sufficient time to receive relevant information from undertakings. Financial Market Participants should therefore be required to report on sustainability matters that are specifically needed to comply with the measures laid down in Regulation (EU 2019/2088) on the financial year following the first transposition year of obligations for undertakings within the scope of this Directive. Other information should be reported according to transposition deadlines that apply to undertakings in the scope of the Directive. The Commission should adopt a second set of reporting standards at the latest by 31 January 2024, specifying complementary information that undertakings should disclose about sustainability matters and reporting areas where necessary, and information that is specific to the sector in which an undertaking operates. The Commission should review the standards every 3 years to take account of relevant developments, including the development of international standards.

</Amend>

<Amend>Amendment <NumAm>43</NumAm>

<DocAmend>Proposal for a directive</DocAmend>

<Article>Recital 47 a (new)</Article>


Text proposed by the Commission	Amendment
	(47 a) Undertakings in certain high emitting sectors such as the extractive and fossil fuel industries, should take into account the relevant sectoral guidance from the IPCC and the International Energy Agency. Undertakings active in the extractive industry as defined in Article 41(1) of Directive 2013/34/EU should be subject to additional sustainability disclosure, as they have high sustainability risks and impacts in terms of greenhouse gas emissions, pollution, biodiversity and human health, thereby bringing particular exposure to the climate and energy transformation in terms of their risks and opportunities.

</Amend>

<Amend>Amendment <NumAm>44</NumAm>

<DocAmend>Proposal for a directive</DocAmend>

<Article>Recital 48</Article>


Text proposed by the Commission	Amendment
(48) Directive 2013/34/EU does not require that the financial statements or the management report are provided in a digital format, which hinders the findability and usability of the reported information. Users of sustainability information increasingly expect such information to be findable and machine-readable in digital formats. Digitalisation creates opportunities to exploit information more efficiently and holds the potential for significant cost savings for both users and undertakings. Undertakings should therefore be required to prepare their financial statements and their management report in XHTML format in accordance with Article 3 of Commission Delegated Regulation (EU) 2019/815,63 and to mark-up sustainability information, including the disclosures required by Article 8 of Regulation (EU) 2020/852, in accordance with that Delegated Regulation. A digital taxonomy to the Union sustainability reporting standards will be necessary to allow for the information reported to be tagged in accordance with those standards. These requirements should feed into the work on digitalisation announced by the Commission in its Communication A European strategy for data64 and in the Digital Finance Strategy for the EU.65 These requirements also complement the creation of a European single access point for public corporate information as envisaged in the capital markets union action plan, which also considers the need for structured data.	(48) Directive 2013/34/EU does not require that the financial statements or the management report are provided in a digital format,which hinders the findability, accessibility and usability of the reported information. Users of sustainability information increasingly expect such information to be findable, comparable and machine-readable in digital formats and fully accessible, including to persons with disabilities. Digitalisation creates opportunities to exploit information more efficiently and holds the potential for significant cost savings for both users and undertakings. Digitalisation also enables the centralisation at Union and Member State level of data in an open and accessible format that facilitates reading and allows for the comparison of data. Undertakings should therefore be required to prepare and make publicly available their financial statements and their management report in XHTML format in accordance with Article 3 of Commission Delegated Regulation (EU) 2019/815,63 and to mark-up sustainability information, including the disclosures required by Article 8 of Regulation (EU) 2020/852, in accordance with that Delegated Regulation. A digital taxonomy to the Union sustainability reporting standards will be necessary to allow for the information reported to be tagged in accordance with those standards. These requirements should feed into the work on digitalisation announced by the Commission in its Communication A European strategy for data64 and in the Digital Finance Strategy for the EU.65 These requirements also complement the creation of a European single access point for public corporate information as envisaged in the capital markets union action plan, which also considers the need for structured data.
__________________	__________________
63 Commission Delegated Regulation (EU) 2018/815 of 17 December 2018 supplementing Directive 2004/109/EC of the European Parliament and of the Council with regard to regulatory technical standards on the specification of a single electronic reporting format (OJ L 143, 29.5.2019, p. 1).	63 Commission Delegated Regulation (EU) 2018/815 of 17 December 2018 supplementing Directive 2004/109/EC of the European Parliament and of the Council with regard to regulatory technical standards on the specification of a single electronic reporting format (OJ L 143, 29.5.2019, p. 1).
64 https://ec.europa.eu/digital-single-market/en/european-strategy-data	64 https://ec.europa.eu/digital-single-market/en/european-strategy-data
65 https://ec.europa.eu/info/publications/200924-digital-finance-proposals_en	65 https://ec.europa.eu/info/publications/200924-digital-finance-proposals_en

</Amend>

<Amend>Amendment <NumAm>45</NumAm>

<DocAmend>Proposal for a directive</DocAmend>

<Article>Recital 49</Article>


Text proposed by the Commission	Amendment
(49) To allow for the inclusion of the reported sustainability information in the European single access point, Member States should ensure that undertakings publish the duly approved annual financial statements and the management report in the prescribed electronic format, and ensure that management reports containing sustainability reporting are made available, without delay following their publication, to the relevant officially appointed mechanism referred to in Article 21(2) of Directive 2004/109/EC.	(49) To allow for the inclusion of the reported sustainability information in the European single access point, Member States should ensure that undertakings publish the duly approved annual financial statements and the management report in the prescribed machine readable electronic format, and ensure that management reports containing sustainability reporting are made available, following their publication, to the relevant officially appointed mechanism referred to in Article 21(2) of Directive 2004/109/EC.

</Amend>

<Amend>Amendment <NumAm>46</NumAm>

<DocAmend>Proposal for a directive</DocAmend>

<Article>Recital 50</Article>


Text proposed by the Commission	Amendment
(50) Article 19a(4) of Directive 2013/34/EU enables Member States to exempt undertakings from including in the management report the non-financial statement required under Article 19a(1). Member States may do so where the undertaking concerned prepares a separate report that is published together with the management report in accordance with Article 30 of that Directive, or where that report is made publicly available on the undertaking's website within a reasonable period of time not exceeding 6 months, after the balance sheet date, and is referred to in the management report. The same possibility exists for the consolidated non-financial statement referred to in Article 29(a)(4) of Directive 2013/34/EU. Twenty Member States have used that option. The possibility to publish a separate report hinders, however, the availability of information that connects financial and information on sustainability matters. It also hinders the findability and accessibility of information for users, especially investors, who are interested in both financial and sustainability information. Possible different publication times for financial and sustainability information exacerbate this problem. Publication in a separate report can also give the impression, internally and externally, that sustainability information belongs to a category of less relevant information, which can impact negatively on the perceived reliability of the information. Undertakings should therefore report sustainability information in the management report and Member States should no longer be allowed to exempt undertakings from the obligation to include in the management report information on sustainability matters. Such obligation also helps to clarify the role of national competent authorities in supervising sustainability reporting, as part of the management report, in accordance with Directive 2004/109/EC. In addition, undertakings required to report sustainability information should in no case be exempted from the obligation to publish the management report as it is important to ensure that sustainability information is publically available.	(50) Article 19a(4) of Directive 2013/34/EU enables Member States to exempt undertakings from including in the management report the non-financial statement required under Article 19a(1). Member States may do so where the undertaking concerned prepares a separate report that is published together with the management report in accordance with Article 30 of that Directive, or where that report is made publicly available on the undertaking's website within a reasonable period of time not exceeding 6 months, after the balance sheet date, and is referred to in the management report. The same possibility exists for the consolidated non-financial statement referred to in Article 29(a)(4) of Directive 2013/34/EU. Twenty Member States have used that option. The possibility to publish a separate report hinders, however, the availability of information that connects financial and information on sustainability matters. It also hinders the findability and accessibility of information for users, especially investors, who are interested in both financial and sustainability information. Possible different publication times for financial and sustainability information exacerbate this problem. Publication in a separate report can also give the impression, internally and externally, that sustainability information belongs to a category of less relevant information, which can impact negatively on the perceived reliability of the information. Undertakings should therefore report sustainability information in the management report and Member States should no longer be allowed to exempt undertakings from the obligation to include in the management report information on sustainability matters but they should, at consolidated level, be allowed to publish sustainability matters information in a specific section of the management report and in a format equivalent to, and compatible with, that laid down for the publication of the financial statements. Such obligation also helps to clarify the role of national competent authorities in supervising sustainability reporting, as part of the management report, in accordance with Directive 2004/109/EC. In addition, undertakings required to report sustainability information should in no case be exempted from the obligation to publish the management report as it is important to ensure that sustainability information is publicly available.

</Amend>

<Amend>Amendment <NumAm>47</NumAm>

<DocAmend>Proposal for a directive</DocAmend>

<Article>Recital 51</Article>


Text proposed by the Commission	Amendment
(51) Article 20 of Directive 2013/34/EU requires undertakings with securities listed on regulated markets to include a corporate governance statement in their management report, which has to contain among other information a description of the diversity policy applied by the undertaking in relation to its administrative, management and supervisory bodies. Article 20 of Directive 2013/34/EU leaves flexibility to undertakings to decide what aspects of diversity they report on. It does not explicitly oblige undertakings to include information on any particular aspect of diversity. In order progress towards a more gender-balanced participation in economic decision-making, it is necessary to ensure that undertakings with securities listed on regulated markets always report on their gender diversity policies and the implementation thereof. However, to avoid unnecessary administrative burden, those undertakings should have the possibility to report some of the information required by Article 20 of Directive 2013/34/EU alongside other sustainability-related information.	(51) Article 20 of Directive 2013/34/EU requires undertakings with securities listed on regulated markets to include a corporate governance statement in their management report, which has to contain among other information a description of the diversity policy applied by the undertaking in relation to its administrative, management and supervisory bodies. Article 20 of Directive 2013/34/EU leaves flexibility to undertakings to decide what aspects of diversity they report on. It does not explicitly oblige undertakings to include information on any particular aspect of diversity. In order progress towards a more gender-balanced participation in economic decision-making, it is necessary to ensure that undertakings with securities listed on regulated markets always report on their gender diversity policies, as well as other aspects of policies such as, age, or educational and professional backgrounds or disabilities and the implementation thereof. However, to avoid unnecessary administrative burden, those undertakings should have the possibility to report some of the information required by Article 20 of Directive 2013/34/EU alongside other sustainability-related information.

</Amend>

<Amend>Amendment <NumAm>48</NumAm>

<DocAmend>Proposal for a directive</DocAmend>

<Article>Recital 52</Article>


Text proposed by the Commission	Amendment
(52) Article 33 of Directive 2013/34/EU requires Member States to ensure that the members of the administrative, management and supervisory bodies of an undertaking have collective responsibility for ensuring that the (consolidated) annual financial statements, the (consolidated) management report and the (consolidated) corporate governance statement are drawn up and published in accordance with the requirements of that Directive. That collective responsibility should be extended to the digitalisation requirements laid down in Delegated Regulation (EU) 2019/815, to the requirement to comply with Union sustainability reporting standards and to the requirement to mark up sustainability reporting.	(52) Article 33 of Directive 2013/34/EU requires Member States to ensure that the members of the administrative, management and supervisory bodies of an undertaking have collective responsibility that is well defined for ensuring that the (consolidated) annual financial statements, the (consolidated) management report and the (consolidated) corporate governance statement are drawn up and published in accordance with the requirements of that Directive. That collective responsibility should be extended to the digitalisation requirements laid down in Delegated Regulation (EU) 2019/815, to the requirement to comply with Union sustainability reporting standards and to the requirement to mark up sustainability reporting.

</Amend>

<Amend>Amendment <NumAm>49</NumAm>

<DocAmend>Proposal for a directive</DocAmend>

<Article>Recital 53</Article>


Text proposed by the Commission	Amendment
(53) The assurance profession distinguishes between limited and reasonable assurance engagements. The conclusion of a limited assurance engagement is usually provided in a negative form of expression by stating that no matter has been identified by the practitioner to conclude that the subject matter is materially misstated. The auditor performs fewer tests than in a reasonable assurance engagement. The amount of work for a limited assurance engagement is therefore less than for reasonable assurance. The work effort in a reasonable assurance engagement entails extensive procedures including consideration of internal controls of the reporting undertaking and substantive testing, and is therefore significantly higher than in a limited assurance engagement. The conclusion of this type of engagement is usually provided in a positive form of expression and states an opinion on the measurement of the subject matter against previously defined criteria. Article 19a(5) and Article 29a(5) of Directive 2013/34/EU require Member States to ensure that the statutory auditor or audit firm checks whether the non-financial statement or the separate report has been provided. It does not require that an independent provider of assurance services verifies the information, although it allows Member States to require such verification where they wish to. The absence of an assurance requirement on sustainability reporting, in contrast to the requirement for the statutory auditor to perform a reasonable assurance engagement on financial statements, would threaten the credibility of the sustainability information disclosed, thus failing to meet the needs of the intended users of that information. Although the objective is to have a similar level of assurance for financial and sustainability reporting, the absence of a commonly agreed standard for the assurance of sustainability reporting creates the risk of different understandings and expectations of what a reasonable assurance engagement would consist of for different categories of sustainability information, especially with regard to forward looking and qualitative disclosures. Therefore, a progressive approach to enhance the level of the assurance required for sustainability information should be considered, starting with an obligation on the statutory auditor or audit firm to express an opinion about the compliance of the sustainability reporting with Union requirements based on a limited assurance engagement. This opinion should cover the compliance of the sustainability reporting with Union sustainability reporting standards, the process carried out by the undertaking to identify the information reported pursuant to the sustainability reporting standards and compliance with the requirement to mark-up sustainability reporting. The auditor should also assess whether the undertaking’s reporting complies with the reporting requirements of Article 8 of Regulation (EU) 2020/852. To guarantee a common understanding and expectations of what a reasonable assurance engagement would consist of, the statutory auditor or audit firm should be required to express an opinion based on a reasonable assurance engagement about the compliance of the sustainability reporting with Union requirements, should the Commission adopt assurance standards for reasonable assurance of sustainability reporting. This would also allow for the progressive development of the assurance market for sustainability information, and of undertakings’ reporting practices. Finally, this progressive approach would phase in the increase in costs for reporting undertakings, given that reasonable assurance is more costly than limited assurance.	(53) The assurance profession distinguishes between limited and reasonable assurance engagements. The conclusion of a limited assurance engagement is usually provided in a negative form of expression by stating that no matter has been identified by the practitioner to conclude that the subject matter is materially misstated. The auditor performs fewer tests than in a reasonable assurance engagement. The amount of work for a limited assurance engagement is therefore less than for reasonable assurance. The work effort in a reasonable assurance engagement entails extensive procedures including consideration of internal controls of the reporting undertaking and substantive testing, and is therefore significantly higher than in a limited assurance engagement. The conclusion of this type of engagement is usually provided in a positive form of expression and states an opinion on the measurement of the subject matter against previously defined criteria. Article19a(5) and Article 29a(5) of Directive 2013/34/EU require Member States to ensure that the statutory auditor or audit firm checks whether the non-financial statement or the separate report has been provided. It does not require that an independent provider of assurance services verifies the information, although it allows Member States to require such verification where they wish to. The absence of an assurance requirement on sustainability reporting, in contrast to the requirement for the statutory auditor to performa reasonable assurance engagement on financial statements, would threaten the credibility of the sustainability information disclosed, thus failing to meet the needs of the intended users of that information. Although the objective is to have a similar level of assurance for financial and sustainability reporting, the absence of a commonly agreed standard for the assurance of sustainability reporting creates the risk of different understandings and expectations of what a reasonable assurance engagement would consist of fordifferent categories of sustainability information, especially with regard to forward looking and qualitative disclosures. Therefore, a progressive and conditioned approach to enhance the level of the assurance required for sustainability information should be considered, starting with an obligation on the statutory auditor or audit firm to express an opinion about the compliance of the sustainability reporting with Union requirements based on a limited assurance engagement. This opinion should cover the compliance of the sustainability reporting with Union sustainability reporting standards, the process carried out by the undertaking to identify the information reported pursuant to the sustainability reporting standards and compliance with the requirement to mark-up sustainability reporting. The auditor should also assess whether the undertaking’s reporting complies with the reporting requirements of Article 8 of Regulation (EU) 2020/852. To guarantee a common understanding and expectations of what a reasonable assurance engagement would consist of, the statutory auditor or audit firm should then be required to express an opinion based on a reasonable assurance engagement about the compliance of the sustainability reporting with Union requirements, after the Commission adopts assurance standards for reasonable assurance of sustainability reporting and following a positive outcome of the review mechanism and should the co-legislators decide to review the level of assurance compliance. This would also allow for the progressive development of the assurance market for sustainability information, and of undertakings’ reporting practices.

</Amend>

<Amend>Amendment <NumAm>50</NumAm>

<DocAmend>Proposal for a directive</DocAmend>

<Article>Recital 54</Article>


Text proposed by the Commission	Amendment
(54) Statutory auditors or audit firms already verify the financial statements and the management report. The assurance of sustainability reporting by the statutory auditors or audit firms would help to ensure the connectivity between, and consistency of, financial and sustainability information, which is particularly important for by users of sustainability information. However, there is a risk of further concentration of the audit market, which could risk the independence of auditors and increase audit or assurance fees. It is therefore desirable to offer undertakings a broader choice of independent assurance service providers for the assurance of sustainably reporting. Member States should therefore be allowed to accredit independent assurance services providers in accordance with Regulation (EC) No 765/2008 of the European Parliament and of the Council66 to provide an opinion on sustainability reporting, which should be published together with the management report. Member States should set out requirements that ensure consistent outcomes in the assurance of sustainability reporting carried out by different assurance service providers. Therefore, all independent assurance services providers should be subject to requirements that are consistent with those set out in Directive 2006/43/EC as regards the assurance of sustainability reporting. This will also guarantee a level playing field among all persons and firms allowed by Member States to provide the opinion on the assurance of sustainability reporting, including statutory auditors. If an undertaking seeks the opinion of an accredited independent assurance services provider other than the statutory auditor on its sustainability reporting, it should not in addition need to request this opinion from the statutory auditor.	(54) Statutory auditors or audit firms already verify the financial statements and the management report. The assurance of sustainability reporting by the statutory auditors or audit firms would help to ensure the connectivity between, and consistency of, financial and sustainability information, which is particularly important for by users of sustainability information. However, there is a risk of further concentration of the audit market, which could risk the independence of auditors and increase audit or assurance fees. It is therefore desirable to offer undertakings a broader choice of independent assurance service providers for the assurance of sustainably reporting. Member States should therefore be allowed to accredit independent assurance services providers in accordance with Regulation (EC) No 765/2008 of the European Parliament and of the Council66 to provide an opinion on sustainability reporting, which should be published together with the management report. Member States should set out requirements that ensure consistent outcomes in the assurance of sustainability reporting carried out by different assurance service providers. Therefore, all independent assurance services providers should be subject to requirements that are equivalent to those set out in Directive 2006/43/EC as regards the assurance of sustainability reporting. This will also guarantee a level playing field among all persons and firms allowed by Member States to provide the opinion on the assurance of sustainability reporting, including statutory auditors. If an undertaking seeks the opinion of an accredited independent assurance services provider other than the statutory auditor on its sustainability reporting, it should not in addition need to request this opinion from the statutory auditor. Furthermore, a high level of independence should been ensured for sustainability reporting assurance operations by establishing the principle of incompatibility between a statutory audit engagement and an assurance of sustainability reporting engagement being carried out by the same statutory auditor or the same audit firm or network.
__________________	__________________
66 Regulation (EC) No 765/2008 of the European Parliament and of the Council of 9 July 2008 setting out the requirements for accreditation and market surveillance relating to the marketing of products and repealing Regulation (EEC) No 339/93 (OJ L 218, 13.8.2008, p. 30).	66 Regulation (EC) No 765/2008 of the European Parliament and of the Council of 9 July 2008 setting out the requirements for accreditation and market surveillance relating to the marketing of products and repealing Regulation (EEC) No 339/93 (OJ L 218, 13.8.2008, p. 30).

</Amend>

<Amend>Amendment <NumAm>51</NumAm>

<DocAmend>Proposal for a directive</DocAmend>

<Article>Recital 56</Article>


Text proposed by the Commission	Amendment
(56) The rules on the approval and recognition of statutory auditors and audit firms should ensure that statutory auditors have the necessary level of theoretical knowledge of subjects relevant to the assurance of sustainability reporting and the ability to apply such knowledge in practice. However, statutory auditors that have already been approved or recognised by a Member State should continue to be allowed to carry out statutory audits and should be allowed to carry out assurance engagements of sustainability reporting. Member States should, however, ensure that already approved statutory auditors acquire the necessary knowledge in sustainability reporting and the assurance of sustainability reporting via continued professional education.	(56) The rules on the approval and recognition of statutory auditors and audit firms should ensure that statutory auditors have the necessary level of theoretical knowledge of subjects relevant to the assurance of sustainability reporting and the ability to apply such knowledge in practice. This knowledge could also be based on previous employment experiences and professional equivalences. However, statutory auditors that have already been approved or recognised by a Member State should continue to be allowed to carry out statutory audits and should be allowed to carry out assurance engagements of sustainability reporting. Member States should, however, ensure that already approved statutory auditors acquire the necessary knowledge in sustainability reporting and the assurance of sustainability reporting via continued professional education.

</Amend>

<Amend>Amendment <NumAm>52</NumAm>

<DocAmend>Proposal for a directive</DocAmend>

<Article>Recital 57</Article>


Text proposed by the Commission	Amendment
(57) It should be ensured that the requirements imposed on auditors as regards their work on the statutory audit and the assurance of sustainability reporting are consistent. It should therefore be laid down that, where the opinion on sustainability reporting is given by the statutory auditor or audit firm carrying out the statutory audit of financial statements, the key audit partners are actively involved in conducting the assurance of sustainability reporting. When carrying out the assurance of sustainability reporting, statutory auditors should be required to devote sufficient time to the engagement and assign sufficient resources to enable them to carry out their duties appropriately. Finally, the client account record should specify the fees charged for the assurance of sustainability reporting and the audit file should include information related to the assurance of sustainability reporting.	(57) It should be ensured that the requirements imposed on auditors as regards their work on the statutory audit and the assurance of sustainability reporting are consistent. It should therefore be laid down that, where the opinion on sustainability reporting is given by the statutory auditor or audit firm carrying out the statutory audit of financial statements, the key audit partners are actively involved in conducting the assurance of sustainability reporting. When carrying out the assurance of sustainability reporting, statutory auditors should be required to devote sufficient time to the engagement and assign sufficient resources and expertise to enable them to carry out their duties appropriately. Finally, the client account record should specify the fees charged for the assurance of sustainability reporting and the audit file should include information related to the assurance of sustainability reporting.

</Amend>

<Amend>Amendment <NumAm>53</NumAm>

<DocAmend>Proposal for a directive</DocAmend>

<Article>Recital 57 a (new)</Article>


Text proposed by the Commission	Amendment
	(57 a) The audit bodies for sustainability reports should have a high level of technical and specialised expertise in the field of sustainability in order to assess the information.

</Amend>

<Amend>Amendment <NumAm>54</NumAm>

<DocAmend>Proposal for a directive</DocAmend>

<Article>Recital 65</Article>


Text proposed by the Commission	Amendment
(65) Article 39 of Directive 2006/43/EC requires Member States to ensure that each public-interest entity has an audit committee, and specifies its tasks with regard to the statutory audit. That audit committee should be assigned with certain tasks with regard to the assurance of sustainability reporting. Those tasks should include the obligation to inform the administrative or supervisory body of the audited entity of the outcome of the assurance of sustainability reporting, and to explain how the audit committee contributed to the integrity of sustainability reporting and what the role of the audit committee was in that process.	(65) Article 39 of Directive 2006/43/EC requires Member States to ensure that each public-interest entity has an audit committee, and specifies its tasks with regard to the statutory audit. That audit committee should be assigned with certain tasks with regard to the assurance of sustainability reporting. Those tasks should include the obligation to inform the administrative or supervisory body of the audited entity of the outcome of the assurance of sustainability reporting, and to explain how the audit committee contributed to the integrity of sustainability reporting and what the role of the audit committee was in that process. Some companies have set up Sustainable Corporate Reporting Committees. Companies may decide to involve both the audit committee and any other committees involved on sustainable reporting.

</Amend>

<Amend>Amendment <NumAm>55</NumAm>

<DocAmend>Proposal for a directive</DocAmend>

<Article>Recital 69</Article>


Text proposed by the Commission	Amendment
(69) According to Article 51 of Directive 2013/34/EU, the enforcement of corporate reporting by undertakings the securities of which are not listed on regulated markets is carried out by Member States. The types of sanctions are, however, not specified, which means that sanctioning regimes can vary widely between Member States, so undermining the single market. To improve sustainability reporting in the internal market and to contribute to the transition towards a fully sustainable and inclusive economic and financial system in which the benefits of growth are broadly shared in accordance with the European Green Deal, Member States should provide for certain sanctions and administrative measures in the case of infringements of sustainability reporting requirements. The sanctioning regime of Directive 2013/34/EU should therefore be strengthened accordingly, whereby Member States are to provide for appropriate sanctions and administrative measures.	(69) According to Article 51 of Directive 2013/34/EU, the enforcement of corporate reporting by undertakings the securities of which are not listed on regulated markets is carried out by Member States. The types of sanctions are, however, not specified, which means that sanctioning regimes can vary widely between Member States, so undermining the single market. To improve sustainability reporting in the internal market and to contribute to the transition towards a fully sustainable and inclusive economic and financial system in which the benefits of growth are broadly shared in accordance with the European Green Deal, Member States should provide for certain types of sanctions and administrative measures in the case of infringements of sustainability reporting requirements. The sanctioning regime of Directive 2013/34/EU should therefore be strengthened accordingly, whereby Member States are to provide for appropriate types of sanctions and administrative measures.

</Amend>

<Amend>Amendment <NumAm>56</NumAm>

<DocAmend>Proposal for a directive</DocAmend>

<Article>Recital 69 a (new)</Article>


Text proposed by the Commission	Amendment
	(69 a) Non-EU companies would should be required to publish their non-financial sustainability reporting and their due diligence strategy on their website according to sustainability report requirements or requirements which are deemed equivalent by the European Commission. Non-compliant companies would should be publicly notified by the Commission that they failed to comply and be required to provide the necessary information. Tougher sanctions could be envisaged through the review mechanism.

</Amend>

<Amend>Amendment <NumAm>57</NumAm>

<DocAmend>Proposal for a directive</DocAmend>

<Article>Recital 71 a (new)</Article>


Text proposed by the Commission	Amendment
	(71 a) The Directive establishes that, by the end of 2026,the Commission shall submit a report on the effectiveness of the new provisions integrated in the present Directive and assess several aspects that were proposed in the negotiation phase. Such a review clause already existed in the NFRD. The review clause in CSRD should assess, in particular the scope enlargement, the level of assurance engagement by auditors, the need to improve European standards on human rights, the added value of expanding the list of activities and high-risk sectors and related economic activities, the development of sanction mechanisms for companies operating in Europe based in third-countries.

</Amend>

<Amend>Amendment <NumAm>58</NumAm>

<DocAmend>Proposal for a directive</DocAmend>

<Article>Article 1 – point 1</Article>

<DocAmend2>Directive 2013/34/EU</DocAmend2>

<Article2>Article 1 – paragraph 3</Article2>


Text proposed by the Commission	Amendment
	3. The coordination measures prescribed by Articles 19a, 19d, 29a, 30 and 33, Article 34(1), second subparagraph, point (aa), paragraphs 2 and 3 of Article 34, and Article 51 of this Directive shall also apply to the laws, regulations and administrative provisions of the Member States relating to the following undertakings regardless of their legal form:

</Amend>

<Amend>Amendment <NumAm>59</NumAm>

<DocAmend>Proposal for a directive</DocAmend>

<Article>Article 1 – point 1</Article>

<DocAmend2>Directive 2013/34/EU</DocAmend2>

<Article2> Article 1 – paragraph 3 – subparagraph 1 - point b a (new)</Article2>


Text proposed by the Commission	Amendment
	(b a) for profit legal entities organised as trusts or as similar legal arrangements.

</Amend>

<Amend>Amendment <NumAm>60</NumAm>

<DocAmend>Proposal for a directive</DocAmend>

<Article>Article 1 – point 1</Article>

<DocAmend2>Directive 2013/34/EU</DocAmend2>

<Article2> Article 1 – paragraph 3 – subparagraph 2a (new)</Article2>


Text proposed by the Commission	Amendment
	2a. By derogation of Article 1 paragraph 3, undertakings referred to in subparagraphs a) and b) shall report information defined in delegated acts referred to in Article 19b paragraph 1 (a) that correspond to the needs of disclosure obligations of Regulation (EU) 2019/2088, on the financial year following the first financial year referred to in Article 5.

</Amend>

<Amend>Amendment <NumAm>61</NumAm>

<DocAmend>Proposal for a directive</DocAmend>

<Article>Article 1 – point 2</Article>

<DocAmend2>Directive 2013/34/EU</DocAmend2>

<Article2>Article 2 – point 17</Article2>


Text proposed by the Commission	Amendment
(17) ‘sustainability matters’ means sustainability factors as defined in Article 2, point (24) of Regulation (EU) 2019/2088 of the European Parliament and of the Council*4, and governance factors;	(17) ‘sustainability matters’ means sustainability factors as defined in Article 2, point (24) of Regulation (EU) 2019/2088 of the European Parliament and of the Council*4, and further specified in the standards and delegated cts referred to in Article 4 thereof, as well as governance factors;

</Amend>

<Amend>Amendment <NumAm>62</NumAm>

<DocAmend>Proposal for a directive</DocAmend>

<Article>Article 1 – point 2</Article>

<DocAmend2>Directive 2013/34/EU</DocAmend2>

<Article2>Article 2 – point 19</Article2>


Text proposed by the Commission	Amendment
(19) ’intangibles’ means non-physical resources that contribute to the undertaking’s value creation;	(19) ’intangibles’ means non-physical resources that contribute to the undertaking’s value creation and are consistent with intangible assets already reported in the financial reporting framework;

</Amend>

<Amend>Amendment <NumAm>63</NumAm>

<DocAmend>Proposal for a directive</DocAmend>

<Article>Article 1 – point 2</Article>

<DocAmend2>Directive 2013/34/EU</DocAmend2>

<Article2> Article 2 – point 20 a (new)</Article2>


Text proposed by the Commission	Amendment
	(20 a) ‘Science-based target’ is a target defined on the basis of conclusive scientific evidence and with independent scientific validation, that when achieved by the undertaking ensures that the undertaking’s impacts, as specified in Article 19a, will be aligned with the sustainability goals and criteria of the European Union for the specific sustainability matters.

</Amend>

<Amend>Amendment <NumAm>64</NumAm>

<DocAmend>Proposal for a directive</DocAmend>

<Article>Article 1 – point 3</Article>

<DocAmend2>Directive 2013/34/EU</DocAmend2>

<Article2>Article 19 a - paragraph 1</Article2>


Text proposed by the Commission	Amendment
1. Large undertakings and, as of 1 January 2026, small and medium-sized undertakings which are undertakings referred to in Article 2, point (1), point (a), shall include in the management report information necessary to understand the undertaking’s impacts on sustainability matters, and information necessary to understand how sustainability matters affect the undertaking’s development, performance and position.	1. Large undertakings shall include in the management report information necessary to understand the undertaking’s impacts on sustainability matters, and information necessary to understand how sustainability matters affect the undertaking’s development, performance and position.

</Amend>

<Amend>Amendment <NumAm>65</NumAm>

<DocAmend>Proposal for a directive</DocAmend>

<Article>Article 1 – point 3</Article>

<DocAmend2>Directive 2013/34/EU</DocAmend2>

<Article2>Article 19 a - paragraph 1 a (new)</Article2>


Text proposed by the Commission	Amendment
	1 a. Third-country companies which are of a legal form comparable to undertakings referred to in Article 19a (1) and that are not established in the territory of the Union when they operate in the internal market selling goods or providing services under implementing measures set out in Article 19b (1) – iic) shall include in the management report information necessary to understand the undertaking’s impacts on sustainability matters, and information necessary to understand how sustainability matters affect the undertaking’s development, performance and position.

</Amend>

<Amend>Amendment <NumAm>66</NumAm>

<DocAmend>Proposal for a directive</DocAmend>

<Article>Article 1 – point 3</Article>

<DocAmend2>Directive 2013/34/EU</DocAmend2>

<Article2>Article 19 a - paragraph 2 – subparagraph 1 - point a - point ii a (new)</Article2>


Text proposed by the Commission	Amendment
	(ii a) the plans of the undertaking to ensure that its business model and strategy are consistent with securing employment in the EU and promoting fair working conditions as defined in the European Pillar of Social Rights

</Amend>

<Amend>Amendment <NumAm>67</NumAm>

<DocAmend>Proposal for a directive</DocAmend>

<Article>Article 1 – paragraph 1 – point 3</Article>

<DocAmend2>Directive 2013/34/EU</DocAmend2>

<Article2>Article 19 a – paragraph 2 – subparagraph 1 – point a – point iii</Article2>


Text proposed by the Commission	Amendment
(iii) the plans of the undertaking to ensure that its business model and strategy are compatible with the transition to a sustainable economy and with the limiting of global warming to 1.5 °C in line with the Paris Agreement;	(iii) the plans of the undertaking, taking into account the entire value chain, including transition plans with implementing actions and related financial and investment plans, and short-term and medium-term absolute emission reduction targets for 2025 and 2030, reviewed every five years up to 2050, to ensure that its overall business model and strategy are compatible with the transition to a sustainable economy and with the limiting of global warming to 1,5 °C in line with the Paris Agreement, with no or limited overshoot and pursuant to the latest recommendations of the IPCC and the European Scientific Advisory Board on Climate Change, and that the undertaking´s operations within the Union are aligned with the objective to achieve climate neutrality by 2050 at the latest, set out in the European Climate Law; and
	- where relevant, the degree of exposure of the undertaking to sectors listed in Divisions 05, 06,09, 19, 35, 46.71, 73.1 of Annex I to Regulation (EC) No1893/2006, insofar as they relate to coal, oil, gas-related activities;
	- where relevant, undertakings the activities of which particularly impact natural resources and/or that operate in sectors particularly relying on natural resources, shall disclose the nature-related impacts on and risks for biodiversity and ecosystems that are associated with the undertaking's business model, and plans by the undertaking to mitigate the loss of nature and restore nature in line with the latest science;

</Amend>

<Amend>Amendment <NumAm>68</NumAm>

<DocAmend>Proposal for a directive</DocAmend>

<Article>Article 1 – point 3</Article>

<DocAmend2>Directive 2013/34/EU</DocAmend2>

<Article2>Article 19 a - paragraph 2 – subparagraph 1 – point a - point v</Article2>


Text proposed by the Commission	Amendment
(v) how the undertaking’s strategy has been implemented with regard to sustainability matters;	(v) how the undertaking’s strategy has been implemented with regard to sustainability matters and science-based targets;

</Amend>

<Amend>Amendment <NumAm>69</NumAm>

<DocAmend>Proposal for a directive</DocAmend>

<Article>Article 1 – point 3</Article>

<DocAmend2>Directive 2013/34/EU</DocAmend2>

<Article2>Article 19 a - paragraph 2 – subparagraph 1 – point b</Article2>


Text proposed by the Commission	Amendment
(b) a description of the targets related to sustainability matters set by the undertaking and of the progress the undertaking has made towards achieving those targets;	(b) a description of the time-bound short-term, mid-term and long-term targets related to sustainability matters set by the undertaking with respect to the undertaking’s risks and opportunities and adverse impacts on sustainability matters, whether such targets are science-based and of the progress the undertaking has made towards achieving those targets including a clearly defined path and implementing actions to reach those;

</Amend>

<Amend>Amendment <NumAm>70</NumAm>

<DocAmend>Proposal for a directive</DocAmend>

<Article>Article 1 – point 3</Article>

<DocAmend2>Directive 2013/34/EU</DocAmend2>

<Article2>Article 19 a - paragraph 2 – subparagraph 1 – point c</Article2>


Text proposed by the Commission	Amendment
(c) a description of the role of the administrative, management and supervisory bodies with regard to sustainability matters;	(c) a description of the role and expertise of the administrative, management and supervisory bodies with regard to sustainability matters;

</Amend>

<Amend>Amendment <NumAm>71</NumAm>

<DocAmend>Proposal for a directive</DocAmend>

<Article>Article 1 – point 3</Article>

<DocAmend2>Directive 2013/34/EU</DocAmend2>

<Article2>Article 19 a - paragraph 2 – subparagraph 1 – point d a (new)</Article2>


Text proposed by the Commission	Amendment
	(d a) information about the existence of incentive schemes offered to members of the administrative, management and supervisory bodies which are linked to sustainability matters;

</Amend>

<Amend>Amendment <NumAm>72</NumAm>

<DocAmend>Proposal for a directive</DocAmend>

<Article>Article 1 – point 3</Article>

<DocAmend2>Directive 2013/34/EU</DocAmend2>

<Article2>Article 19 a - paragraph 2 – subparagraph 1 – point e - point i</Article2>


Text proposed by the Commission	Amendment
(i) the due diligence process implemented with regard to sustainability matters;	(i) the due diligence process implemented with regard to sustainability matters and, where applicable, pursuant to EU and/or national legislation;

</Amend>

<Amend>Amendment <NumAm>73</NumAm>

<DocAmend>Proposal for a directive</DocAmend>

<Article>Article 1 – point 3</Article>

<DocAmend2>Directive 2013/34/EU</DocAmend2>

<Article2>Article 19 a - paragraph 2 – subparagraph 1 – point e – point iii</Article2>


Text proposed by the Commission	Amendment
(iii) any actions taken, and the result of such actions, to prevent, mitigate or remediate actual or potential adverse impacts;	(iii) any actions taken, and the result of such actions, to identify, track, prevent, mitigate, remediate or cease actual or potential adverse impacts;

</Amend>

<Amend>Amendment <NumAm>74</NumAm>

<DocAmend>Proposal for a directive</DocAmend>

<Article>Article 1 – point 3</Article>

<DocAmend2>Directive 2013/34/EU</DocAmend2>

<Article2>Article 19 a - paragraph 2 – subparagraph 1 – point g</Article2>


Text proposed by the Commission	Amendment
(g) indicators relevant to the disclosures referred to in points (a) to (f).	(g) indicators and time-bound targets relevant to the disclosures referred to in points (a) to(f) based on the guidelines developed by the European Commission.

</Amend>

<Amend>Amendment <NumAm>75</NumAm>

<DocAmend>Proposal for a directive</DocAmend>

<Article>Article 1 – point 3</Article>

<DocAmend2>Directive 2013/34/EU</DocAmend2>

<Article2>Article 19 a – paragraph 2 – subparagraph 3</Article2>


Text proposed by the Commission	Amendment
Undertakings shall report the process carried out to identify the information that they have included in the management report in accordance with paragraph 1 and in this process they shall take account of short, medium and long-term horizons.	Undertakings shall report the process carried out to identify the information that they have included in the management report in accordance with paragraph 1 and 2, in this process they shall take account of short, medium and long-term objectives, strategies and targets.

</Amend>

<Amend>Amendment <NumAm>76</NumAm>

<DocAmend>Proposal for a directive</DocAmend>

<Article>Article 1 – point 3</Article>

<DocAmend2>Directive 2013/34/EU</DocAmend2>

<Article2>Article 19 a – paragraph 3 – subparagraph 2</Article2>


Text proposed by the Commission	Amendment
Where appropriate, the information referred to in paragraphs 1 and 2 shall contain information about the undertaking’s value chain, including the undertaking’s own operations, products and services, its business relationships and its supply chain.	Where applicable, the information referred to in paragraphs 1 and 2 shall contain information about the undertaking’s value chain, including the undertaking’s own operations, products and services, its business relationships and its supply chain.

</Amend>

<Amend>Amendment <NumAm>77</NumAm>

<DocAmend>Proposal for a directive</DocAmend>

<Article>Article – point 3</Article>

<DocAmend2>Directive 2013/34/EU</DocAmend2>

<Article2>Article 19 a - paragraph 3 – subparagraph 3</Article2>


Text proposed by the Commission	Amendment
Where appropriate, the information referred to in paragraphs 1 and 2 shall also contain references to, and additional explanations of, other information included in the management report in accordance with Article 19 and amounts reported in the annual financial statements.	Where applicable, the information referred to in paragraphs 1 and 2 shall also contain references to, and additional explanations of, other information included in the management report in accordance with Article 19 and amounts reported in the annual financial statements.

</Amend>

<Amend>Amendment <NumAm>78</NumAm>

<DocAmend>Proposal for a directive</DocAmend>

<Article>Article 1 – point 3</Article>

<DocAmend2>Directive 2013/34/EU</DocAmend2>

<Article2>Article 19 a – paragraph 4 a (new)</Article2>


Text proposed by the Commission	Amendment
	4 a. The Commission shall prepare non-binding guidelines, on appropriate methodologies to generate the forward-looking information to be provided in the reporting.

</Amend>

<Amend>Amendment <NumAm>79</NumAm>

<DocAmend>Proposal for a directive</DocAmend>

<Article>Article 1 - point 3</Article>

<DocAmend2>Directive 2013/34/EU</DocAmend2>

<Article2>Article 19 a – paragraph 5</Article2>


Text proposed by the Commission	Amendment
5. By way of derogation from Article 19a, paragraphs 1 to 4, small and medium sized undertakings referred to in Article 2, point (1), point (a), may report in accordance with the sustainability reporting standards for small and medium sized undertakings referred to in Article 19c.	5. In accordance with applicable EU and nationallegislation and practice, the appropriate worker’s representatives shall take part in the design of the reporting system and the outcome should be presented, where applicable, to the relevant administrative, management or supervisory bodies.

</Amend>

<Amend>Amendment <NumAm>80</NumAm>

<DocAmend>Proposal for a directive</DocAmend>

<Article>Article 1– point 3</Article>

<DocAmend2>Directive 2013/34/EU</DocAmend2>

<Article2>Article 19 a – paragraph 7 – subparagraph 1</Article2>


Text proposed by the Commission	Amendment
An undertaking which is a subsidiary undertaking shall be exempted from the obligations set out in paragraphs 1 to 4 if that undertaking and its subsidiary undertakings are included in the consolidated management report of a parent undertaking, drawn up in accordance with Articles 29 and 29a. An undertaking that is a subsidiary undertaking from a parent undertaking that is established in a third country shall also be exempted from the obligations set out in paragraphs 1 to 4 where that undertaking and its subsidiary undertakings are included in the consolidated management report of that parent undertaking and where the consolidated management report is drawn up in a manner that may be considered equivalent, in accordance with the relevant implementing measures adopted pursuant to Article 23(4), point (i), of Directive 2004/109/EC of the European Parliament and of the Council*6, to the manner required by the sustainability reporting standards referred to in Article 19b of this Directive.	deleted
__________________
*6 Directive 2004/109/EC of the European Parliament and of the Council of 15 December 2004 on the harmonisation of transparency requirements in relation to information about issuers whose securities are admitted to trading on a regulated market and amending Directive 2001/34/EC (OJ L 390, 31.12.2004, p. 38).

<TitreJust>Justification</TitreJust>

L'exemption proposée par la Commission diffère des règles pour la communication des données financières qui ne dispensent pas les entreprises de publier leur bilan si ce dernier est intégré dans les comptes consolidés de la maison mère ou du groupe. La consolidation des données de durabilité sur base d’un critère de matérialité au niveau de la maison mère ou du groupe peut entrainer l’omission de certaines informations particulièrement pertinentes pour les investisseurs et les parties prenantes. Le rapporteur propose de conserver l’obligation en matière d'information pour les filiales et les maisons mères au niveau de l’entreprise. L'absence d'exemption ne remet pas en cause la possibilité pour une entreprise mère de mutualiser les coûts et les ressources avec ses filiales afin de remplir leurs obligations en matière d'information et d’audit de durabilité. Cela ne remet pas non plus en cause la possibilité pour les entreprises mères de produire un rapport de gestion consolidé.

</Amend>

<Amend>Amendment <NumAm>81</NumAm>

<DocAmend>Proposal for a directive</DocAmend>

<Article>Article 1 –point 3</Article>

<DocAmend2>Directive 2013/34/EU</DocAmend2>

<Article2>Article 19 a – paragraph 7 – subparagraph 2</Article2>


Text proposed by the Commission	Amendment
The consolidated management report of the parent undertaking referred to in subparagraph 1 shall be published in accordance with Article 30, in the manner prescribed by the law of the Member State by which the undertaking that is exempted from the obligations set out in paragraphs 1 to 4 is governed.	The consolidated management report of a parent undertaking shall be published in accordance with Article 30, in the manner prescribed by the law of the Member State by which the undertaking which meets the requirements referred to in paragraphs 1 to 4 is governed.

</Amend>

<Amend>Amendment <NumAm>82</NumAm>

<DocAmend>Proposal for a directive</DocAmend>

<Article>Article 1 –point 3</Article>

<DocAmend2>Directive 2013/34/EU</DocAmend2>

<Article2>Article 19 a – paragraph 7 – subparagraph 3</Article2>


Text proposed by the Commission	Amendment
The Member State by which the undertaking that is exempted from the obligations set out in paragraphs 1 to 4 is governed, may require that the consolidated management report referred to in the first subparagraph of this paragraph is published in an official language of the Member State or in a language customary in the sphere of international finance, and that any necessary translation into those languages is certified.	The Member State by which the undertaking which meets the requirements referred to in paragraphs 1 to 4 is governed may require that the consolidated management report of a parent undertaking is published in an official language of the Member State or in a language customary in the sphere of international finance, and that any necessary translation into those languages is certified.

</Amend>

<Amend>Amendment <NumAm>83</NumAm>

<DocAmend>Proposal for a directive</DocAmend>

<Article>Article 1 – point 3</Article>

<DocAmend2>Directive 2013/34/EU</DocAmend2>

<Article2> Article 19 a – paragraph 7 a (new)</Article2>


Text proposed by the Commission	Amendment
	7 a. The Commission shall be empowered to adopt delegated acts in accordance with Article 49 to establish and amend a list of activities that shall include economic activities in the following high-risk sectors:
	- Garment and footwear, including manufacturing of textile,
	- Agriculture, including manufacturing of food an beverage,
	- Extractive sector (mining, oil and gas industries),
	- Minerals, including tin, tantalum, tungsten and gold, as well as all other mineral resources.
	The list should correspond to the European NACE codes and take into account, when possible, the lowest classification level.

</Amend>

<Amend>Amendment <NumAm>84</NumAm>

<DocAmend>Proposal for a directive</DocAmend>

<Article>Article 1 – point 4</Article>

<DocAmend2>Directive 2013/34/EU</DocAmend2>

<Article2>Article 19 b – paragraph 1 – subparagraph 1 – point a</Article2>


Text proposed by the Commission	Amendment
(a) by 31 October 2022, the Commission shall adopt delegated acts specifying the information that undertakings are to report in accordance with paragraphs 1 and 2 of Article 19a, and at least specifying information corresponding to the needs of financial market participants subject to the disclosure obligations of Regulation (EU) 2019/2088.	(a) by 30 April 2023, the Commission shall adopt delegated acts specifying the information that undertakings are to report in accordance with paragraphs 1 and 2 of Article 19a, and at least specifying information corresponding to the needs of financial market participants subject to the disclosure obligations of Regulation (EU) 2019/2088.

</Amend>

<Amend>Amendment <NumAm>85</NumAm>

<DocAmend>Proposal for a directive</DocAmend>

<Article>Article 1 – point 4</Article>

<DocAmend2>Directive 2013/34/EU</DocAmend2>

<Article2>Article 19 b – paragraph 1 – subparagraph 1 – point b</Article2>


Text proposed by the Commission	Amendment
(b) by 31 October 2023, the Commission shall adopt delegated acts specifying:	(b) by 1 January 2024, the Commission shall adopt delegated acts specifying:

</Amend>

<Amend>Amendment <NumAm>86</NumAm>

<DocAmend>Proposal for a directive</DocAmend>

<Article>Article 1 – point 4</Article>

<DocAmend2>Directive 2013/34/EU</DocAmend2>

<Article2>Article 19 b – paragraph 1 – subparagraph 1 – point b – point ii</Article2>


Text proposed by the Commission	Amendment
(ii) information that undertakings shall report that is specific to the sector in which they operate.	(ii) information that undertakings shall report that is specific to the sector in which they operate, prioritising information in economic activities in high-risk sectors referred to in Article19a (7a);

</Amend>

<Amend>Amendment <NumAm>87</NumAm>

<DocAmend>Proposal for a directive</DocAmend>

<Article>Article 1 – point 4</Article>

<DocAmend2>Directive 2013/34/EU</DocAmend2>

<Article2>Article 19 b – paragraph 1 – subparagraph 1 – point ii a (new)</Article2>


Text proposed by the Commission	Amendment
	(ii a) the specific measurable objectives based on scientific evidence set out in Article 2, point(20a);

</Amend>

<Amend>Amendment <NumAm>88</NumAm>

<DocAmend>Proposal for a directive</DocAmend>

<Article>Article 1 – point 4</Article>

<DocAmend2>Directive 2013/34/EU</DocAmend2>

<Article2>Article 19 b – paragraph 1 – subparagraph 1 – point ii b (new)</Article2>


Text proposed by the Commission	Amendment
	(ii b) the criteria and implementing rules for sustainability reporting for undertakings operating economic activities in high-risk sectors referred to in Article 19a (7a);

</Amend>

<Amend>Amendment <NumAm>89</NumAm>

<DocAmend>Proposal for a directive</DocAmend>

<Article>Article 1 – point 4</Article>

<DocAmend2>Directive 2013/34/EU</DocAmend2>

<Article2>Article 19 b – paragraph 1 – subparagraph 1 – point ii c (new)</Article2>


Text proposed by the Commission	Amendment
	(ii c) implementing rules and guidelines for sustainability reporting for undertakings referred to in Article 19 a) point 1a which are governed by the law of a third country and are not established in the territory of the Union when they operate in the internal market selling goods or providing services.

</Amend>

<Amend>Amendment <NumAm>90</NumAm>

<DocAmend>Proposal for a directive</DocAmend>

<Article>Article 1 – point 4</Article>

<DocAmend2>Directive 2013/34/EU</DocAmend2>

<Article2>Article 19 b – paragraph 2 – subparagraph 1</Article2>


Text proposed by the Commission	Amendment
2. The sustainability reporting standards referred to in paragraph 1 shall require that the information to be reported is understandable, relevant, representative, verifiable, comparable, and is represented in a faithful manner.	2. The sustainability reporting standards referred to in paragraph 1 shall ensure the quality and relevance of reported information, by requiring that its representative, verifiable, reliable, easily accessible, comparable, and is represented in a faithful manner and, where possible, based on specific measurable science-based objectives as described in article 19b) 1 b.iia).

</Amend>

<Amend>Amendment <NumAm>91</NumAm>

<DocAmend>Proposal for a directive</DocAmend>

<Article>Article 1 – point 4</Article>

<DocAmend2>Directive 2013/34/EU</DocAmend2>

<Article2>Article 19 b – paragraph 2 – subparagraph 2 – point a – point i</Article2>


Text proposed by the Commission	Amendment
(i) climate change mitigation;	(i) climate change mitigation including:
	- emissions on all scopes of greenhouse gas emissions, including Scope 1, 2 and 3 GHG emissions, and other relevant indicators, as appropriate;
	- transition, financial and investment plans related to GHG emissions and any emission reduction targets of the undertaking and any targeted date to achieve climate neutrality; and
	- the alignment of the undertaking’s business model and strategy with the goal of limiting of global warming to well-below 2 °C and pursuing efforts to limit it to 1.5° with no or limited overshoot,

</Amend>

<Amend>Amendment <NumAm>92</NumAm>

<DocAmend>Proposal for a directive</DocAmend>

<Article>Article 1 – point 4</Article>

<DocAmend2>Directive 2013/34/EU</DocAmend2>

<Article2> Article 19 b – paragraph 2 – subparagraph 2 – point a – point iii</Article2>


Text proposed by the Commission	Amendment
(iii) water and marine resources;	(iii) the sustainable use and protection of water, marine and soil resources;

</Amend>

<Amend>Amendment <NumAm>93</NumAm>

<DocAmend>Proposal for a directive</DocAmend>

<Article>Article 1 - point 4</Article>

<DocAmend2>Directive 2013/34/EU</DocAmend2>

<Article2>Article 19 b – paragraph 2 – subparagraph 2 – point a – point iv</Article2>


Text proposed by the Commission	Amendment
(iv) resource use and circular economy;	(iv) the transition to circular economy, including resource use;

</Amend>

<Amend>Amendment <NumAm>94</NumAm>

<DocAmend>Proposal for a directive</DocAmend>

<Article>Article 1 – point 4</Article>

<DocAmend2>Directive 2013/34/EU</DocAmend2>

<Article2>Article 19 b – paragraph 2 – subparagraph 2 – point a – point v</Article2>


Text proposed by the Commission	Amendment
(v) pollution;	(v) pollution prevention and control;

</Amend>

<Amend>Amendment <NumAm>95</NumAm>

<DocAmend>Proposal for a directive</DocAmend>

<Article>Article 1 – point 4</Article>

<DocAmend2>Directive 2013/34/EU</DocAmend2>

<Article2>Article 19 b – paragraph 2 – subparagraph 2 – point a – point vi</Article2>


Text proposed by the Commission	Amendment
(vi) biodiversity and ecosystems;	(vi) protection and restoration of biodiversity and ecosystems;

</Amend>

<Amend>Amendment <NumAm>96</NumAm>

<DocAmend>Proposal for a directive</DocAmend>

<Article>Article 1 – point 4</Article>

<DocAmend2>Directive 2013/34/EU</DocAmend2>

<Article2>Article 19 b – paragraph 2 – subparagraph 2 – point b – point i</Article2>


Text proposed by the Commission	Amendment
(i) equal opportunities for all, including gender equality and equal pay for equal work, training and skills development, and employment and inclusion of people with disabilities;	(i) equal treatment and opportunities for all, including gender equality and equal pay for work of equal value, diversity at all levels as defined under existing EU legislation, pay transparency, measures against violence and harassment, training and skills development, in particular the rate and breakdown of workers participating in training, and employment and inclusion of people with disabilities, specifying information on accessibility measures, on a country-by-country basis;

</Amend>

<Amend>Amendment <NumAm>97</NumAm>

<DocAmend>Proposal for a directive</DocAmend>

<Article>Article 1 – point 4</Article>

<DocAmend2>Directive 2013/34/EU</DocAmend2>

<Article2>Article 19 b – paragraph 2 – subparagraph 2 – point b – point i a (new)</Article2>


Text proposed by the Commission	Amendment
	(i a) the composition of the workforce disaggregated by sex, on a country-by-country basis;

</Amend>

<Amend>Amendment <NumAm>98</NumAm>

<DocAmend>Proposal for a directive</DocAmend>

<Article>Article 1 – point 4</Article>

<DocAmend2>Directive 2013/34/EU</DocAmend2>

<Article2>Article 19 b – paragraph 2 – subparagraph 2 – point b – point i b (new)</Article2>


Text proposed by the Commission	Amendment
	(i b) existence of collective agreements and the coverage of workers therein, and the existence of work councils, including international work councils, in accordance with applicable law and practice

</Amend>

<Amend>Amendment <NumAm>99</NumAm>

<DocAmend>Proposal for a directive</DocAmend>

<Article>Article 1 – paragraph 1 – point 4</Article>

<DocAmend2>Directive 2013/34/EU</DocAmend2>

<Article2>Article 19b – paragraph 2 – subparagraph 2 – point b – point ii</Article2>


Text proposed by the Commission	Amendment
(ii) working conditions, including secure and adaptable employment, wages, social dialogue, collective bargaining and the involvement of workers, work-life balance, and a healthy, safe and well-adapted work environment;	(ii) working conditions, including secure employment, adequate and fair wages, working time, social dialogue, freedom of association, collective bargaining and the information, consultation and participation rights of workers, including with regard to their participation in administrative and supervisory boards, work-life balance, maternity, paternity and parental leave, and health and safety, and the rate of workers injured and sick at work;
	In accordance with the Union labour law acquis and national law and practice, the central management shall consult with the trade unions and workers' representatives at the beginning of the reporting period on the design of the reporting system, including the indicators included and the means of obtaining and verifying sustainability information. Central management shall also consult trade unions and workers' representatives in the identification of risks and impacts of the undertaking on the environment and people.
	Workers' representatives shall be provided with the necessary resources to ensure the effective exercise of the rights arising from this Directive. This shall include the support of an expert, where this is in line with national law and practice.
	Member States shall ensure that workers' rights to information and consultation are respected in relation to sustainability reporting and are exercised in accordance with the existing Union legal framework, such as Directive 2002/14/EC, Directive 2009/38/EC, Directive 2001/86/ EC and 2003/ 72/ EC.

</Amend>

<Amend>Amendment <NumAm>100</NumAm>

<DocAmend>Proposal for a directive</DocAmend>

<Article>Article 1 – point 4</Article>

<DocAmend2>Directive 2013/34/EU</DocAmend2>

<Article2>Article 19 b – paragraph 2 – subparagraph 2 – point b – point iii</Article2>


Text proposed by the Commission	Amendment
(iii) respect for the human rights, fundamental freedoms, democratic principles and standards established in the International Bill of Human Rights and other core UN human rights conventions, the International Labour Organization’s Declaration on Fundamental Principles and Rights at Work and the ILO fundamental conventions and the Charter of Fundamental Rights of the European Union.	(iii) respect for the human rights, fundamental freedoms, democratic principles and standards established in the International Bill of Human Rights, the UN Guiding Principles on Business and Human Rights and other core UN human rights conventions, including the UN Convention on Persons with Disabilities, the UN Declaration on the Rights of Indigenous Peoples, the International Labour Organization’s Declaration on Fundamental Principles and Rights at Work and the ILO fundamental and governance conventions, the International Labour Organization's Tripartite Declaration of Principles concerning Multinational Enterprises and Social Policy, including the list of relevant standards in Annex I, the European Convention of Human Rights, the revised European Social Charter, the Charter of Fundamental Rights of the European Union, the OECD Guidelines on Multinational Enterprises and the EU labour law acquis.

</Amend>

<Amend>Amendment <NumAm>101</NumAm>

<DocAmend>Proposal for a directive</DocAmend>

<Article>Article 1 – point 4</Article>

<DocAmend2>Directive 2013/34/EU</DocAmend2>

<Article2>Article 19 b – paragraph 2 – subparagraph 2 – point c – point i</Article2>


Text proposed by the Commission	Amendment
(i) the role of the undertaking’s administrative, management and supervisory bodies, including with regard to sustainability matters, and their composition;	(i) the role and expertise of the undertaking’s administrative, management and supervisory bodies and committees, including with regard to sustainability matters and their composition;

</Amend>

<Amend>Amendment <NumAm>102</NumAm>

<DocAmend>Proposal for a directive</DocAmend>

<Article>Article 1 – point 4</Article>

<DocAmend2>Directive 2013/34/EU</DocAmend2>

<Article2>Article 19 b – paragraph 2 – subparagraph 2 – point c – point ii</Article2>


Text proposed by the Commission	Amendment
(ii) business ethics and corporate culture, including anti-corruption and anti-bribery;	(ii) business ethics and corporate culture, including anti-corruption and anti-bribery and internal arrangements within the undertaking for protecting whistle-blowers and animal welfare where applicable ;

</Amend>

<Amend>Amendment <NumAm>103</NumAm>

<DocAmend>Proposal for a directive</DocAmend>

<Article>Article 1 – point 4</Article>

<DocAmend2>Directive 2013/34/EU</DocAmend2>

<Article2>Article 19 b – paragraph 2 – subparagraph 2 – point c – point iii</Article2>


Text proposed by the Commission	Amendment
(iii) political engagements of the undertaking, including its lobbying activities;	(iii) political influence of the undertaking, including its lobbying activities and political donations;

</Amend>

<Amend>Amendment <NumAm>104</NumAm>

<DocAmend>Proposal for a directive</DocAmend>

<Article>Article 1 – point 4</Article>

<DocAmend2>Directive 2013/34/EU</DocAmend2>

<Article2>Article 19 b – paragraph 2 – subparagraph 2 – point c – point iv</Article2>


Text proposed by the Commission	Amendment
(iv) the management and quality of relationships with business partners, including payment practices;	(iv) the management and quality of relationships with business partners, including payment practices, especially towards SMEs;

</Amend>

<Amend>Amendment <NumAm>105</NumAm>

<DocAmend>Proposal for a directive</DocAmend>

<Article>Article 1 – point 4</Article>

<DocAmend2>Directive 2013/34/EU</DocAmend2>

<Article2>Article 19 b – paragraph 2 – subparagraph 2 – point c – point v</Article2>


Text proposed by the Commission	Amendment
(v) the undertaking’s internal control and risk management systems, including in relation to the undertaking’s reporting process.	(v) the undertaking’s internal control and risk management systems, including in relation to the undertaking’s reporting and decision-making process.

</Amend>

<Amend>Amendment <NumAm>106</NumAm>

<DocAmend>Proposal for a directive</DocAmend>

<Article>Article 1 –point 4</Article>

<DocAmend2>Directive 2013/34/EU</DocAmend2>

<Article2> Article 19b – paragraph 2 - subparagraph 2a (new)</Article2>


Text proposed by the Commission	Amendment
	When specifying the information about environmental factors that undertakings are to disclose, coherence should be ensured with the definitions in Article 2 and the reporting requirements of Article 8 in Regulation (EU) 2020/852 (Taxonomy Regulation) and the delegated acts adopted pursuant to that Regulation.

</Amend>

<Amend>Amendment <NumAm>107</NumAm>

<DocAmend>Proposal for a directive</DocAmend>

<Article>Article 1 – point 4</Article>

<DocAmend2>Directive 2013/34/EU</DocAmend2>

<Article2>Article 19 b – paragraph 3 – point aa</Article2>


Text proposed by the Commission	Amendment
	(a a) administrative costs of the reporting for undertakings;

</Amend>

<Amend>Amendment <NumAm>108</NumAm>

<DocAmend>Proposal for a directive</DocAmend>

<Article>Article 1 – paragraph 1 – point 4</Article>

<DocAmend2>Directive 2013/34/EU</DocAmend2>

<Article2>Article 19b – paragraph 3 – point c</Article2>


Text proposed by the Commission	Amendment
(c) the criteria set out in the delegated acts adopted pursuant to Regulation (EU) 2020/852*7;	(c) the criteria, indicators and methodologies set out in the delegated acts adopted pursuant to Regulation (EU) 2020/852*7, including inter alia technical screening criteria, criteria for substantial contribution, DNSH criteria.
__________	__________
*7 Regulation (EU) 2020/852 of the European Parliament and of the Council of 18 June 2020 on the establishment of a framework to facilitate sustainable investment, and amending Regulation (EU) 2019/2088 (OJ L 198, 22.6.2020, p. 13).	*7 Regulation (EU) 2020/852 of the European Parliament and of the Council of 18 June 2020 on the establishment of a framework to facilitate sustainable investment, and amending Regulation (EU) 2019/2088 (OJ L 198, 22.6.2020, p. 13).

</Amend>

<Amend>Amendment <NumAm>109</NumAm>

<DocAmend>Proposal for a directive</DocAmend>

<Article>Article 1 – paragraph 1 – point 4</Article>

<DocAmend2>Directive 2013/34/EU</DocAmend2>

<Article2>Article 19b – paragraph 3 – point g</Article2>


Text proposed by the Commission	Amendment
(g) Directive 2003/87/EC of the European Parliament and of the Council*13;	(g) Regulation (EU) 2021/1119 of the European Parliament and of the Council*13;
________	______
*13 Directive 2003/87/EC of the European Parliament and of the Council of 13 October 2003 establishing a scheme for greenhouse gas emission allowance trading within the Community and amending Council Directive 96/61/EC (OJ L 275, 25.10.2003, p. 32).	*13 Regulation (EU) 2021/1119 of the European Parliament and of the Council of 30 June 2021 establishing the framework for achieving climate neutrality and amending Regulations (EC) No 401/2009 and (EU) 2018/1999 (‘European Climate Law’) OJ L 243, 9.7.2021, p. 1–17.

</Amend>

<Amend>Amendment <NumAm>110</NumAm>

<DocAmend>Proposal for a directive</DocAmend>

<Article>Article 1 – point 4</Article>

<DocAmend2>Directive 2013/34/EU</DocAmend2>

<Article2>Article 19 b – paragraph 3 – point h a (new)</Article2>


Text proposed by the Commission	Amendment
	(h a) Directive (EU) 2019/1937 of the European Parliament and of the Council.

</Amend>

<Amend>Amendment <NumAm>111</NumAm>

<DocAmend>Proposal for a directive</DocAmend>

<Article>Article 1 – point 4</Article>

<DocAmend2>Directive 2013/34/EU</DocAmend2>

<Article2>Article 19 c – subparagraph 1</Article2>


Text proposed by the Commission	Amendment
Sustainability reporting standards for SMEs	Voluntary sustainability reporting standards for SMEs
The Commission shall adopt delegated acts in accordance with Article 49 to provide for sustainability reporting standards proportionate to the capacities and characteristics of small and medium-sized undertakings. Those sustainability reporting standards shall specify which information referred to in Articles 19a and 29a small and medium-sized undertakings referred to in Article 2, point (1)(a) shall report. They shall take into account the criteria set out in Article 19b, paragraphs 2 and 3. They shall also, where relevant, specify the structure in which that information shall be reported.	The Commission shall adopt delegated acts in accordance with Article 49 to provide for sustainability reporting standards proportionate to the capacities and characteristics of small and medium-sized undertakings. Those sustainability reporting standards shall specify which information referred to in Articles 19a and 29a small and medium-sized undertakings that choose to use sustainability reporting standards for SMEs on a voluntary basis while meeting the requirements and obligations of this Directive concerning the content, auditing and publication of the management report, shall report. They shall take into account the criteria set out in Article 19b, paragraphs 2 and 3. They shall also, where relevant, specify the structure in which that information shall be reported.

</Amend>

<Amend>Amendment <NumAm>112</NumAm>

<DocAmend>Proposal for a directive</DocAmend>

<Article>Article 1 – point 4</Article>

<DocAmend2>Directive 2013/34/EU</DocAmend2>

<Article2>Article 19 c – subparagraph 1a (new)</Article2>


Text proposed by the Commission	Amendment
	Member States are invited to assess the impact of their transposition acts on SMEs givings pecific attention to small enterprises, in particular SMEs indirectly impacted by the Directive obligations, in order to ensure that they are not disproportionately affected, and to publish the results of such assessments. Member States may set up and operate measures, such as certified labels or financial support, to help SMEs apply voluntary sustainability reporting standards.

</Amend>

<Amend>Amendment <NumAm>113</NumAm>

<DocAmend>Proposal for a directive</DocAmend>

<Article>Article 1 – point 4</Article>

<DocAmend2>Directive 2013/34/EU</DocAmend2>

<Article2>Article 19 c – subparagrpah 1b (new)</Article2>


Text proposed by the Commission	Amendment
	Voluntary sustainability reporting standards should set a reference for undertakings that are within the scope of the Directive regarding the level of sustainability information that they could reasonably request from SME suppliers and clients in their value chains.

</Amend>

<Amend>Amendment <NumAm>114</NumAm>

<DocAmend>Proposal for a directive</DocAmend>

<Article>Article 1 – point 4</Article>

<DocAmend2>Directive 2013/34/EU</DocAmend2>

<Article2>Article 19 d – paragraph 1</Article2>


Text proposed by the Commission	Amendment
1. Undertakings subject to Article 19a shall prepare their financial statements and their management report in a single electronic reporting format in accordance with Article 3 of Commission Delegated Regulation (EU) 2019/815*15 and shall mark-up their sustainability reporting, including the disclosures laid down in Article 8 of Regulation (EU) 2020/852, in accordance with that Delegated Regulation.	1. Undertakings subject to Article 19a shall prepare their financial statements and their management report in a single electronic reporting format in accordance with Article 3 of Commission Delegated Regulation (EU) 2019/815*15 and shall mark-up their sustainability reporting, including the disclosures laid down in Article 8 of Regulation (EU) 2020/852, in accordance with that Delegated Regulation. The mark-up must be compatible with the consolidation and re-use of such data in a European single access point as described in Action 1 of the Commission Communication entitled ‘A Capital Markets Union for people and businesses – new action plan’.

</Amend>

<Amend>Amendment <NumAm>115</NumAm>

<DocAmend>Proposal for a directive</DocAmend>

<Article>Article 1 – point 4</Article>

<DocAmend2>Directive 2013/34/EU</DocAmend2>

<Article2>Article 19 d – paragraph 1 a (new)</Article2>


Text proposed by the Commission	Amendment
	1 a. Electronic financial statements and management reports must comply with the relevant access requirements laid down in Directive (EU)2019/882 on the accessibility requirements for products and services.

</Amend>

<Amend>Amendment <NumAm>116</NumAm>

<DocAmend>Proposal for a directive</DocAmend>

<Article>Article 1 – point 4</Article>

<DocAmend2>Directive 2013/34/EU</DocAmend2>

<Article2>Article 19 d – paragraph 2</Article2>


Text proposed by the Commission	Amendment
2. Undertakings subject to Article 29a shall prepare their consolidated financial statements and their consolidated management report in a single electronic reporting format in accordance with Article 3 of Delegated Regulation (EU) 2019/815 and shall mark-up sustainability reporting, including the disclosures laid down in Article 8 of Regulation (EU) 2020/852.	2. Undertakings subject to Article 29a shall prepare their consolidated financial statements and their consolidated management report in a single electronic reporting format in accordance with Article 3 of Delegated Regulation (EU) 2019/815 and shall mark-up sustainability reporting, including the disclosures laid down in Article 8 of Regulation (EU) 2020/852. The mark-up must be compatible with the format specified in paragraph 1.

</Amend>

<Amend>Amendment <NumAm>117</NumAm>

<DocAmend>Proposal for a directive</DocAmend>

<Article>Article 1 – point 5 – point a</Article>

<DocAmend2>Directive 2013/34/EU</DocAmend2>

<Article2>Article 20 – paragraph 1 - point g</Article2>


Text proposed by the Commission	Amendment
(g) a description of the diversity policy applied in relation to the undertaking's administrative, management and supervisory bodies with regard to gender and other aspects such as, age, or educational and professional backgrounds, the objectives of that diversity policy, how it has been implemented and the results in the reporting period. If no such policy is applied, the statement shall contain an explanation as to why this is the case.;	(g) a description of the diversity policy applied in relation to the undertaking's administrative, management and supervisory bodies with regard to gender and other aspects such as, age, or educational and professional backgrounds or disabilities, the objectives of that diversity policy, how it has been implemented and the results in the reporting period. If no such policy is applied, the statements hall contain an explanation as to why this is the case.

</Amend>

<Amend>Amendment <NumAm>118</NumAm>

<DocAmend>Proposal for a directive</DocAmend>

<Article>Article 2 – paragraph 1 – point 4</Article>

<DocAmend2>Directive 2004/109/EC</DocAmend2>

<Article2>Article 28d – paragraph 1</Article2>


Text proposed by the Commission	Amendment
After consulting the European Environment Agency and the European Union Agency for Fundamental Rights, ESMA shall issue guidelines in accordance with Article 16 of Regulation 1095/2010 on the supervision of sustainability reporting by national competent authorities.	After consulting the European Environment Agency, the European Union Agency for Fundamental Rights and the European Labour Authority, ESMA shall issue guidelines in accordance with Article 16 of Regulation (EU) No 1095/2010 on the supervision of sustainability reporting by national competent authorities within a reasonable timeframe.

</Amend>

<Amend>Amendment <NumAm>119</NumAm>

<DocAmend>Proposal for a directive</DocAmend>

<Article>Article 1 – point 7</Article>

<DocAmend2>Directive 2013/34/EU</DocAmend2>

<Article2>Article 29 a – paragraph 1</Article2>


Text proposed by the Commission	Amendment
1. Parent undertakings of a large group shall include in the consolidated management report information necessary to understand the group's impacts on sustainability matters, and information necessary to understand how sustainability matters affect the group's development, performance and position.	1. Parent undertakings of a large group shall include in the consolidated management report information necessary to understand the group's impacts on sustainability matters, and information necessary to understand how sustainability matters affect the group's development, performance and position. This information shall be published in a specific section of the management report and in a format equivalent to, and compatible with, that laid down for the publication of the financial statements.

</Amend>

<Amend>Amendment <NumAm>120</NumAm>

<DocAmend>Proposal for a directive</DocAmend>

<Article>Article 1 – point 7</Article>

<DocAmend2>Directive 2013/34/EU</DocAmend2>

<Article2>Article 29 a - paragraph 2 – subparagraph 1 – introductory part</Article2>


Text proposed by the Commission	Amendment
2. The information referred to in paragraph 1 shall contain in particular:	2. The information referred to in paragraph 1 shall contain:

</Amend>

<Amend>Amendment <NumAm>121</NumAm>

<DocAmend>Proposal for a directive</DocAmend>

<Article>Article 1 – point 7</Article>

<DocAmend2>Directive 2013/34/EU</DocAmend2>

<Article2>Article 29 a - paragraph 2 – subparagraph 1 – point a</Article2>


Text proposed by the Commission	Amendment
(a) a brief description of the group's business model and strategy, including:	(a) a description of the group's business model and strategy, including:

</Amend>

<Amend>Amendment <NumAm>122</NumAm>

<DocAmend>Proposal for a directive</DocAmend>

<Article>Article 1 – point 7</Article>

<DocAmend2>Directive 2013/34/EU</DocAmend2>

<Article2>Article 29 a - paragraph 2 – subparagraph 1 – point a – point iii</Article2>


Text proposed by the Commission	Amendment
(iii) the plans of the group to ensure that the group’s business model and strategy compatible with the transition to a sustainable economy and with the limiting of global warming to 1.5 °C in line with the Paris Agreement;	(iii) the plans of the undertaking, taking into account the entire value chain, including transition plans with implementing actions and related financial and investment plans and short-term and medium-term absolute emission reduction targets for2025 and 2030, reviewed every five years up to 2050, to ensure that its overall business model and strategy are compatible with the transition to a sustainable economy and with the limiting of global warming to 1,5 °C inline with the Paris Agreement, with no or limited overshoot and pursuant to the latest recommendations of the IPCC and the European Scientific Advisory Board on Climate Change, and the undertaking´s operations within the Union are aligned with the objective to achieve climate neutrality by 2050 at the latest, set out in Regulation (EU)2021/1119 of the European Parliament and of the Council of 30 June 2021(“European Climate Law”); and
	- where relevant, the degree of exposure of the under taking to sectors listed in Divisions 05, 06,09, 19, 35, 46.71, 73.1 of Annex I to Regulation (EC) No 1893/2006 insofar as they relate to coal, oil, gas-related activities;
	- where relevant, undertakings, which activities particularly impact natural resources and, or that operate in sectors particularly relying on natural resources, should disclose the nature-related impacts and risks on biodiversity and ecosystems that are associated with the undertaking's business model and plans by the undertaking to mitigate the loss of nature and restore nature in consistence with the latest science;

</Amend>

<Amend>Amendment <NumAm>123</NumAm>

<DocAmend>Proposal for a directive</DocAmend>

<Article>Article 1 – point 7</Article>

<DocAmend2>Directive 2013/34/EU</DocAmend2>

<Article2>Article 29 a - paragraph 2 – subparagraph 1 – point a – point iv</Article2>


Text proposed by the Commission	Amendment
(iv) how the group’s business model and strategy take account of the interests of the group’s stakeholders and of the impacts of the group on sustainability matters;	(iv) how the undertaking’s business model and strategy take account of the interests of the undertaking’s stakeholders and of the impact of the undertaking on sustainability matters;

</Amend>

<Amend>Amendment <NumAm>124</NumAm>

<DocAmend>Proposal for a directive</DocAmend>

<Article>Article 1 – point 7</Article>

<DocAmend2>Directive 2013/34/EU</DocAmend2>

<Article2>Article 29 a - paragraph 2 – subparagraph 1 – point a – point v</Article2>

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