The overall aim of all types of sustainability reporting is to show, through non-financial reporting, how a company is working on sustainability but also how sustainability affects the company's operations and value. That is, what are the risks and opportunities for the company.
Sustainability reporting enables investors, financiers and other stakeholders to consider sustainability factors in addition to financial ones when assessing a company. The pressure for regulation on sustainability reporting has increased in recent years. One reason is the EU's strong commitment to sustainability, including a focus on climate change and achieving the Paris Agreement targets.
The EU requires companies to report on sustainability in accordance with, for example:
- Non Financial Reporting Directive (NFRD)
- Taxonomy Regulation
In the future, the Corporate Sustainability Reporting Directive (CSRD) will also come into force. This will mean, for example, that more companies will be subject to sustainability reporting requirements and third-party auditing requirements. In Sweden, this adjustment is less important as rules on non-financial information are implemented in Sweden via the Annual Accounts Act, which imposes requirements on even more companies than those listed in the CSRD.
There are also voluntary frameworks and standards for sustainability reporting such as:
- Global Reporting Initiative (GRI)
- Task Force on Climate-related Financial Disclosures (TCFD) - disclosure recommendations
