ESG Compliance, Governance & Assurance

What gets measured, gets managed.

Peter Drucker

Does your organisation operate in the EU as a subsidiary or parent entity?

Then, there’s a good chance your organisation will likely have to comply with the CSRD (Corporate Sustainability Reporting Directive) regulatory framework.

Are you aware of the end-to-end scope of reporting requirements that will ultimately sit under Finance?

European Union

Around 42,500 companies are anticipated to be impacted. However, this may be reduced if the EU omnibus updates are approved and transposed to local legislation.

Wave 1

EU-listed companies that meet the turnover or balance sheet criteria and have over 500 employees must report the data points and disclosures in 2025 as part of their annual report. Many have already met this requirement.

Wave 2 & 3

Other EU companies meeting the above criteria (except for an employee criterion of 250) were initially scheduled to report in 2026. However, in April 2025, a “stop-the-clock” vote in the EU effectively postponed the reporting until 2028. Unless local Member State legislation requires otherwise. This delay, coupled with the ongoing review of the criteria and the potential increase of the employee criterion to 1000, adds to the uncertainty. The timing and process for these changes remain unclear.

SMEs, also known as Wave 3 entities, also benefit from the “stop-the-clock” delay.

Non-EU parent companies must begin data collection for reporting in 2029.

For organisations with more than 1000 employees, making a ‘no-regret’ plan is not just advised; it’s crucial. Even for those companies with fewer employees, reviewing the value chain and determining what will likely be important for their customers is a proactive step towards preparedness.

Depending on a specific (and subject to disclosure) materiality assessment, companies have to disclose information on the following:

  • Climate Change
  • Pollution
  • Water & Marine Resources
  • Biodiversity & Eco-Systems
  • Resource Use & Circular Economy
  • Own Workforce
  • Workers in the Value Chain
  • Affected Communities
  • Consumers & End-Users
  • Business Conduct

Overall, 96 European Sustainability Reporting Standards with disclosure and reporting requirements are being introduced. The audit requirements will initially be on a limited assurance basis.

Outside of the EU, other regulations are in place

IFRS

The ISSB issued the S1 and S2 disclosures in 2023. They cover climate-related processes and controls, risks and opportunities, and metrics and targets to monitor performance.

Many countries have adopted local standards based on the ISSB standards. This includes Australia, Brazil, Canada, China, Hong Kong, Japan, Malaysia, Singapore, Switzerland, Türkiye, and the UK. Others are in the process of reviewing or have made commitments to adopt the standards in the future.

UK

The Financial Reporting Council (FRC) has removed references to ESG in a new version of the UK Corporate Governance Code. The new code comes into force in 2025.  However, Provision 29’s requirements around the control framework could impact the operational processes in ESG.

Furthermore, given that any material EU subsidiaries must meet CSRD requirements, many UK-listed companies may still choose to follow those standards.

Is your company ready to meet these regulatory requirements?

Do you have the resources, time, and expertise available?

Would you like to learn more about what it means for your organisation and what ESG readiness steps you should take now?

Then, why not set up a complimentary briefing with Loughridge Transformations’ Principal Consultant?

Arrange an ESG Briefing

Schedule

Governance & Assurance

We use our in-house governance and assurance model, inspired by COSO, when reviewing any organisation’s control framework. It includes all or any of the pillars—business objectives, financial and climate change reporting, and compliance.

We excel in delivering solutions for our clients, whether at the client site or virtually, individually, or in teams. Working across multiple geographies, cultures, and time zones is second nature to the experienced consultants at Loughridge Transformations. They are experts in delivering all services in SOx (SEC), EU, UK, and other regulatory environments.

Our recent blogs may give some more insight into Loughridge Transformations‘ approach: