EU Sustainable Finance action plan and its impact on companies

Abstract

The objective of this study is to analyse the EU Sustainable Finance action plan, and its regulation and policymaking for delivering the European Green Deal and fighting the global issue of climate change. The study will focus on the implications of the components of the Sustainable Finance Package on companies, considering the development of the Non-Financial Reporting directive. The latest proposal of the European Commission to support the sustainability transition in the EU consists of ambitious policies to further enhance the transition to a more sustainable economy. The study will investigate EU’s proposal and long-term sustainability ambitions included in this package of measures, in particular its proposal for a Corporate Sustainability Reporting Directive (CSRD) and the EU Taxonomy Climate Delegated Act. After identifying the key elements of these new regulations, the paper will analyse how the new directive will make corporate sustainability reporting more harmonized and how this will support companies’ transparency and allow them to provide more consistent information to key stakeholders. In addition, through a collection of primary data from an expert interview, the author intends to present evidence and key insights of the concrete actions that businesses can take to prepare for the implementation of the new directive and the changes they will need to do in a strategic level. Furthermore, the study indicates that the EU regulation and the CSRD will be without a doubt tightened in the coming years and this is something companies should start considering already and start to find better ways to respond to their environmental challenges to comply with the policymaking of the EU while remaining financially stable.