Misreporting Sustainability and the Regulatory Response in the European Union
Ketonen, Maria (2024)
2024
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Julkaisun pysyvä osoite on
https://urn.fi/URN:NBN:fi:amk-2024051411764
https://urn.fi/URN:NBN:fi:amk-2024051411764
Tiivistelmä
Misleading reporting about corporate sustainability is increasing in the European Union. From 2017, large companies in the EU have been required to report on non-financial matters under the Non-Financial Reporting Directive (NFRD). The NFRD will be replaced by the Corporate Sustainability Reporting Directive with a wider scope and more comprehensive requirements.
Previous research has established that the lack of standardised frameworks for sustainability reporting and assurance, and the voluntary nature of sustainability reporting assurance have contributed to misleading sustainability reports.
This study aims to answer the question “How is the EU addressing the issue of misleading sustainability reporting with the Corporate Sustainability Reporting Directive?” by studying the problem through a literature review and identifying the characteristics of misleading reporting and the fundamental requirements of the CSRD. Two case studies are included to concretise the issue of misleading reports accompanied by a discussion on whether such reports would be likely to exist under the CSRD.
The thesis finds that by introducing new mandatory standards for sustainability reporting and mandatory assurance, the CSRD has the potential to significantly limit the number of misleading sustainability disclosures in the EU if implemented appropriately.
Previous research has established that the lack of standardised frameworks for sustainability reporting and assurance, and the voluntary nature of sustainability reporting assurance have contributed to misleading sustainability reports.
This study aims to answer the question “How is the EU addressing the issue of misleading sustainability reporting with the Corporate Sustainability Reporting Directive?” by studying the problem through a literature review and identifying the characteristics of misleading reporting and the fundamental requirements of the CSRD. Two case studies are included to concretise the issue of misleading reports accompanied by a discussion on whether such reports would be likely to exist under the CSRD.
The thesis finds that by introducing new mandatory standards for sustainability reporting and mandatory assurance, the CSRD has the potential to significantly limit the number of misleading sustainability disclosures in the EU if implemented appropriately.