The European Union is awash with various regulations, standards and directives. And each one comes with its own confusing abbreviations. Here is a ready reckoner of these terms.
CSDD: The EU’s Corporate Sustainability Due Diligence Directive (CSDD) is a legislative framework that obliges companies, including those in financial services, to demonstrate what action they are taking to protect the environment and human rights. The CSDD sets out a cross-sector EU standard for human rights and environmental due diligence.
CSRD: The Corporate Sustainability Reporting Directive (CSRD) is a set of rules that require large companies and listed companies to publish regular reports on the social and environmental risks they face and on how their activities impact people and the environment
ESRS: The EU Sustainability Reporting Standards (ESRS) is a set of EU compliance and disclosure requirements that aim to make corporate sustainability and environmental, social, and governance (ESG) reporting within the EU more accurate, common, consistent, comparable, and standardised. The ESRS are part of the Corporate Sustainability Reporting Directive (CSRD), which was approved on November 28, 2022, and will go into effect throughout the European Union in 2023.
PPMFLR: The EU Prohibition of Products Made with Forced Labor on the Union Market Regulation is one of the EU’s sustainability regulations and aims to prevent importing products made with forced labour into the EU market.
WEEE: The Waste from Electrical and Electronic Equipment (WEEE) is a European Community Directive that sets criteria for the collection, treatment, and recovery of waste electrical and electronic equipment. The directive aims to contribute to sustainable production and consumption by improving the collection, treatment, and recycling of electrical and electronic equipment (EEE) at the end of their life
The following are not EU-centric but are widely used in the EU:
GRI: GRI stands for Global Reporting Initiative, which is an international independent standards organization that helps businesses, governments, and other organizations understand and communicate their impacts on issues such as climate change, human rights, and corruption. GRI provides the world’s most widely used sustainability reporting standards, which cover topics that range from biodiversity to tax, waste to emissions, diversity and equality to health and safety
TCFD: The Task Force on Climate-related Financial Disclosures (TCFD) is an organization that was established in December 2015 by the Financial Stability Board (FSB) to develop a set of voluntary climate-related financial risk disclosures. The TCFD aims to improve and increase reporting of climate-related financial information to support investors, lenders, and insurance underwriters in appropriately assessing and pricing a specific set of risks related to climate change.
TNFD: The Taskforce on Nature-related Financial Disclosures (TNFD) is an international cross-sector initiative that provides a framework for organisations to report and act on evolving nature-related risks and opportunities. TNFD is not developing a new standard, but rather an integrated framework that builds on existing standards, metrics, and data.
A familiarity and understanding of the regulations, standards and directives are essential for doing business with the EU.
Utkarsh Majmudar 