### (18) considering the growing relevance of sustainability-related risks and taking into account that small and medium-sized enterprises (smes) listed on regulated markets comprise a significant proportion of all listed undertakings in the union , in order to ensure investor protection it is appropriate to require that also those smes disclose information on sustainability matters. the introduction of this requirement will help to ensure that financial market participants can include smaller listed undertakings in investment portfolios on the basis that they report the sustainability information that financial market participants need. it will therefore help to protect and enhance the access of smaller listed undertakings to financial capital , and avoid discrimination against such undertakings on the part of financial market participants. the introduction of this requirement is also necessary to ensure that financial market participants have the information they need from investee undertakings to be able to comply with their own sustainability disclosure requirements laid down in regulation (eu) 2019/2088. smes listed on regulated markets should , however , be provided with sufficient time to prepare for the application of the requirement to report sustainability information , due to their smaller size and more limited resources , and taking account of the difficult economic circumstances created by the covid-19 pandemic. they should also be given the possibility to report according to standards that are proportionate to the capacities and resources of smes. non-listed smes can also choose to use these proportionate standards on a voluntary basis. the sme standards will set a reference for undertakings that are within the scope of the directive regarding the level of sustainability information that they could reasonably request from sme suppliers and clients in their value chains. ### (18) in light of the fact that only 32% of reportable companies comply with the european commission's efforts , smes are to be excluded from any reporting obligations in a first step. only if the still to be defined targets as well as time-dependent intermediate steps of this directive prove to be efficient in closing the information gap in the market , voluntary , proportional and simple reporting standards for smes shall follow.


### (18) considering the growing relevance of sustainability-related risks and taking into account that small and medium-sized enterprises (smes) listed on regulated markets comprise a significant proportion of all listed undertakings in the union , in order to ensure investor protection it is appropriate to require that also those smes disclose information on sustainability matters. the introduction of this requirement will help to ensure that financial market participants can include smaller listed undertakings in investment portfolios on the basis that they report the sustainability information that financial market participants need. it will therefore help to protect and enhance the access of smaller listed undertakings to financial capital , and avoid discrimination against such undertakings on the part of financial market participants. the introduction of this requirement is also necessary to ensure that financial market participants have the information they need from investee undertakings to be able to comply with their own sustainability disclosure requirements laid down in regulation (eu) 2019/2088. smes listed on regulated markets should , however , be provided with sufficient time to prepare for the application of the requirement to report sustainability information , due to their smaller size and more limited resources , and taking account of the difficult economic circumstances created by the covid-19 pandemic. they should also be given the possibility to report according to standards that are proportionate to the capacities and resources of smes. non-listed smes can also choose to use these proportionate standards on a voluntary basis. the sme standards will set a reference for undertakings that are within the scope of the directive regarding the level of sustainability information that they could reasonably request from sme suppliers and clients in their value chains. ### deleted


### (21) articles 19a(3) and 29a(3) of directive 2013/34/eu currently exempt all subsidiary undertakings from the obligation to report non-financial information where such undertakings and their subsidiary undertakings are included in the consolidated management report of their parent undertaking , provided this includes the required non-financial information. it is necessary , however to ensure that sustainability information is easily accessible for users , and to bring transparency about which is the parent undertaking of the exempted subsidiary undertaking which is reporting at consolidated level. it is therefore necessary to require those subsidiary undertakings to publish the consolidated management report of their parent undertaking and to include a reference in their management report to the fact that they are exempted from reporting sustainability information. that exemption should also apply where the parent undertaking reporting at consolidated level is a third country undertaking reporting sustainability information in accordance with the requirements of this directive or in a manner equivalent to eu sustainability reporting standards. ### (21) articles 19a(3) and 29a(3) of directive 2013/34/eu currently exempt all subsidiary undertakings from the obligation to report non-financial information where such undertakings and their subsidiary undertakings are included in the consolidated management report of their parent undertaking , provided this includes the required non-financial information. it is necessary , however to ensure that sustainability information is easily accessible for users , and to bring transparency about which is the parent undertaking of the exempted subsidiary undertaking which is reporting at consolidated level. it is therefore necessary to require those subsidiary undertakings to publish the consolidated management report of their parent undertaking and to include a reference in their management report to the fact that they are exempted from reporting sustainability information. that exemption should also apply where the parent undertaking reporting at consolidated level is a third country undertaking reporting sustainability information in accordance with the requirements of this directive or in a manner equivalent to international reporting frameworks.


### (23) credit institutions and insurance undertakings play a key role in the transition towards a fully sustainable and inclusive economic and financial system in line with the european green deal. they can have significant positive and negative impacts via their lending , investment and underwriting activities. credit institutions and insurance undertakings other than those that are required to comply with directive 2013/34/eu , including cooperatives and mutual undertakings , should therefore be subject to sustainability reporting requirements provided that they meet certain size criteria. users of that information would thus be enabled to assess both the impacts of these undertakings on society and the environment and the risks arising from sustainability matters that these undertakings could face. to ensure coherence with the reporting requirements of council directive 86/635/eec50 on the annual accounts and consolidated accounts of banks and other financial institutions , sustainability reporting member states may choose not to apply sustainability reporting requirements to credit institutions listed in article 2(5) of directive 2013/36/eu of the european parliament and of the council51 . ### (23) credit institutions and insurance undertakings play a key role in the transition towards a fully sustainable and inclusive economic and financial system in line with the european green deal. they can have significant positive and negative impacts via their lending , investment and underwriting activities. credit institutions and insurance undertakings other than those that are required to comply with directive 2013/34/eu , including cooperatives and mutual undertakings , should therefore be subject to sustainability reporting requirements provided that they meet certain size criteria. users of that information would thus be enabled to assess both the impacts of these undertakings on society and the environment and the risks arising from sustainability matters that these undertakings could face. to ensure coherence with the reporting requirements of council directive 86/635/eec50 on the annual accounts and consolidated accounts of banks and other financial institutions , sustainability reporting member states may choose not to apply sustainability reporting requirements to credit institutions listed in article 2(5) of directive 2013/36/eu of the european parliament and of the council as well as ‘small and non-complex institutions’ as defined in article 4 (1) point (145) of regulation (eu) no 575/2013. 51


### (23) credit institutions and insurance undertakings play a key role in the transition towards a fully sustainable and inclusive economic and financial system in line with the european green deal. they can have significant positive and negative impacts via their lending , investment and underwriting activities. credit institutions and insurance undertakings other than those that are required to comply with directive 2013/34/eu , including cooperatives and mutual undertakings , should therefore be subject to sustainability reporting requirements provided that they meet certain size criteria. users of that information would thus be enabled to assess both the impacts of these undertakings on society and the environment and the risks arising from sustainability matters that these undertakings could face. to ensure coherence with the reporting requirements of council directive 86/635/eec50 on the annual accounts and consolidated accounts of banks and other financial institutions , sustainability reporting member states may choose not to apply sustainability reporting requirements to credit institutions listed in article 2(5) of directive 2013/36/eu of the european parliament and of the council51 . ### (23) credit institutions and insurance undertakings play a key role in the transition towards a fully sustainable and inclusive economic and financial system in line with the european green deal. they can have significant positive and negative impacts via their lending , investment and underwriting activities. credit institutions and insurance undertakings other than those that are required to comply with directive 2013/34/eu , including cooperatives and mutual undertakings , should therefore be subject to sustainability reporting requirements provided that they meet certain size criteria. users of that information would thus be enabled to assess both the impacts of these undertakings on society and the environment and the risks arising from sustainability matters that these undertakings could face. to ensure coherence with the reporting requirements of council directive 86/635/eec50 on the annual accounts and consolidated accounts of banks and other financial institutions , sustainability reporting member states may choose not to apply sustainability reporting requirements to credit institutions listed in article 2(5) of directive 2013/36/eu of the european parliament and of the council as well as ‘small and non-complex institutions’ as defined in article 4(1)(145) of regulation (eu) no 575/201351 .


### (24) the list of sustainability matters on which undertakings are required to report should be as coherent as possible with the definition of ‘sustainability factors’ laid down in regulation (eu) 2019/2088. that list should also correspond to the needs and expectations of users and undertakings themselves , who often use the terms ‘environmental’ , ‘social’ and ‘governance’ as a means to categorise the three main sustainability matters. the list of sustainability factors laid down in regulation (eu) 2019/2088 does not explicitly include governance matters. the definition of sustainability matters in directive 2013/34/eu should therefore be based on the definition of ‘sustainability factors’ laid down in regulation (eu) 2019/2088 , but with the addition of governance matters. ### (24) the list of sustainability matters on which undertakings are required to report should be fully in line with the definition of ‘sustainability factors’ laid down in regulation (eu) 2019/2088 , to prevent a mismatch of information required by data users as well as information to be reported by data preparers. that list should also correspond to the needs and expectations of users and undertakings themselves , who often use the terms ‘environmental’ , ‘social’ and ‘governance’ as a means to categorise the three main sustainability matters.


### (26) articles 19a(1) and 29a(1) of directive 2013/34/eu require undertakings to disclose information about five reporting areas: business model , policies (including due diligence processes implemented) , the outcome of those policies , risks and risk management , and key performance indicators relevant to the business. article 19a(1) of directive 2013/34/eu does not contain explicit references to other reporting areas that users of information consider relevant , some of which align with disclosures included in international frameworks , including the recommendations of the task force on climate-related financial disclosures. disclosure requirements should be specified in sufficient detail to ensure that undertakings report information on their resilience to risks related to sustainability matters. in addition to the reporting areas identified in articles 19a(1) and 29a(1) of directive 2013/34/eu , undertakings should therefore be required to disclose information about their business strategy and the resilience of the business model and strategy to risks related to sustainability matters , any plans they may have to ensure that their business model and strategy are compatible with the transition to a sustainable and climate-neutral economy; whether and how their business model and strategy take account of the interests of stakeholders; any opportunities for the undertaking arising from sustainability matters; the implementation of the aspects of the business strategy which affect , or are affected by sustainability matters; any sustainability targets set by the undertaking and the progress made towards achieving them; the role of the board and management with regard to sustainability matters; the principal actual and potential adverse impacts connected with the undertaking’s activities; and how the undertaking has identified the information that they report on. once the disclosure of elements such as targets and the progress towards achieving them is required , the separate requirement to disclose the outcomes of policies is no longer necessary. ### (26) articles 19a(1) and 29a(1) of directive 2013/34/eu require undertakings to disclose information about five reporting areas: business model , policies (including due diligence processes implemented) , the outcome of those policies , risks and risk management , and key performance indicators relevant to the business. article 19a(1) of directive 2013/34/eu does not contain explicit references to other reporting areas that users of information consider relevant , some of which align with disclosures included in international frameworks , including the recommendations of the task force on climate-related financial disclosures. disclosure requirements should be specified in sufficient detail to ensure that undertakings report information on their resilience to risks related to sustainability matters. in addition to the reporting areas identified in articles 19a(1) and 29a(1) of directive 2013/34/eu , undertakings should therefore be required to disclose information about their business strategy and the resilience of the business model and strategy to risks related to sustainability matters , any plans they may have to ensure that their business model and strategy are compatible with the transition to a sustainable and climate-neutral economy; any opportunities for the undertaking arising from sustainability matters; the implementation of the aspects of the business strategy which affect , or are affected by sustainability matters; any sustainability targets set by the undertaking and the progress made towards achieving them; the role of the board and management with regard to sustainability matters; the principal actual and potential adverse impacts connected with the undertaking’s activities; and how the undertaking has identified the information that they report on. once the disclosure of elements such as targets and the progress towards achieving them is required , the separate requirement to disclose the outcomes of policies is no longer necessary.


### (26) articles 19a(1) and 29a(1) of directive 2013/34/eu require undertakings to disclose information about five reporting areas: business model , policies (including due diligence processes implemented) , the outcome of those policies , risks and risk management , and key performance indicators relevant to the business. article 19a(1) of directive 2013/34/eu does not contain explicit references to other reporting areas that users of information consider relevant , some of which align with disclosures included in international frameworks , including the recommendations of the task force on climate-related financial disclosures. disclosure requirements should be specified in sufficient detail to ensure that undertakings report information on their resilience to risks related to sustainability matters. in addition to the reporting areas identified in articles 19a(1) and 29a(1) of directive 2013/34/eu , undertakings should therefore be required to disclose information about their business strategy and the resilience of the business model and strategy to risks related to sustainability matters , any plans they may have to ensure that their business model and strategy are compatible with the transition to a sustainable and climate-neutral economy; whether and how their business model and strategy take account of the interests of stakeholders; any opportunities for the undertaking arising from sustainability matters; the implementation of the aspects of the business strategy which affect , or are affected by sustainability matters; any sustainability targets set by the undertaking and the progress made towards achieving them; the role of the board and management with regard to sustainability matters; the principal actual and potential adverse impacts connected with the undertaking’s activities; and how the undertaking has identified the information that they report on. once the disclosure of elements such as targets and the progress towards achieving them is required , the separate requirement to disclose the outcomes of policies is no longer necessary. ### (26) articles 19a(1) and 29a(1) of directive 2013/34/eu require undertakings to disclose information about five reporting areas: business model , policies (including due diligence processes implemented) , the outcome of those policies , risks and risk management , and key performance indicators relevant to the business. article 19a(1) of directive 2013/34/eu does not contain explicit references to other reporting areas that users of information consider relevant , some of which align with disclosures included in international frameworks , including the recommendations of the task force on climate-related financial disclosures.


### (27) to ensure consistency with international instruments such as the un guiding principles on business and human rights and the oecd due diligence guidance for responsible business conduct , the due diligence disclosure requirements should be specified in greater detail than is the case in article 19a(1) , point (b) , and article 29a(1) , point (b) of directive 2013/34/eu. due diligence is the process that undertakings carry out to identify , prevent , mitigate and remediate the principal actual and potential adverse impacts connected with their activities and identifies how they address those adverse impacts. impacts connected with an undertaking’s activities include impacts directly caused by the undertaking , impacts to which the undertaking contributes , and impacts which are otherwise linked to the undertaking’s value chain. the due diligence process concerns the whole value chain of the undertaking including its own operations , its products and services , its business relationships and its supply chains. in alignment with the un guiding principles on business and human rights , an actual or potential adverse impact is to be considered principal where it measures among the greatest impacts connected with the undertaking’s activities based on: the gravity of the impact on people or the environment; the number of individuals that are or could be affected , or the scale of damage to the environment; and the ease with which the harm could be remediated , restoring the environment or affected people to their prior state. ### deleted


### (28) directive 2013/34/eu does not require the disclosure of information on intangibles other than intangible assets recognised in the balance sheet. it is widely recognised that information on intangible assets and other intangible factors , including internally-generated intangibles , is underreported , impeding the proper assessment of an undertaking’s development , performance and position and monitoring of investments. to enable investors to better understand the increasing gap between the accounting book value of many undertakings and their market valuation , which is observed in many sectors of the economy , adequate reporting on intangibles should be required. it is therefore necessary to require undertakings to disclose information on intangibles other than intangible assets recognised in the balance sheet , including intellectual capital , human capital , including skills development , and social and relationship capital , including reputation capital. information on intangibles should also include information related to research and development. ### deleted


### (29) articles 19a(1) and 29a(1) of directive 2013/34/eu do not specify whether the information to be reported is to be forward looking or information about past performance. there is currently a lack of forward-looking disclosures , which users of sustainability information especially value. articles 19a and 29a of directive 2013/34/eu should therefore specify that the sustainability information reported shall include forward-looking and retrospective , and both qualitative and quantitative information. reported sustainability information should also take into account short , medium and long-term time horizons and contain information about the undertaking’s whole value chain , including its own operations , its products and services , its business relationships , and its supply chain , as appropriate. information about the undertaking’s whole value chain would include information related to its value chain within the eu and information that covers third countries if the undertaking’s value chain extends outside the eu. ### (29) articles 19a(1) and 29a(1) of directive 2013/34/eu do not specify whether the information to be reported is to be forward looking or information about past performance. there is currently a lack of forward-looking disclosures , which users of sustainability information especially value. articles 19a and 29a of directive 2013/34/eu should therefore specify that the sustainability information reported shall include forward-looking and retrospective , and both qualitative and quantitative information that is based on science based harmonised , comparable and uniform indicators and consistent with the harmonised life cycle assessment. reported sustainability information should also take into account short , medium and long-term time horizons and contain information about the undertaking’s whole value chain , including its own operations , its products and services , its business relationships , and its supply chain , as appropriate. information about the undertaking’s whole value chain would include information related to its value chain within the eu and information that covers third countries if the undertaking’s value chain extends outside the eu.


### (29) articles 19a(1) and 29a(1) of directive 2013/34/eu do not specify whether the information to be reported is to be forward looking or information about past performance. there is currently a lack of forward-looking disclosures , which users of sustainability information especially value. articles 19a and 29a of directive 2013/34/eu should therefore specify that the sustainability information reported shall include forward-looking and retrospective , and both qualitative and quantitative information. reported sustainability information should also take into account short , medium and long-term time horizons and contain information about the undertaking’s whole value chain , including its own operations , its products and services , its business relationships , and its supply chain , as appropriate. information about the undertaking’s whole value chain would include information related to its value chain within the eu and information that covers third countries if the undertaking’s value chain extends outside the eu. ### (29) articles 19a(1) and 29a(1) of directive 2013/34/eu do not specify whether the information to be reported is to be forward looking or information about past performance. there is currently a lack of forward-looking disclosures , which users of sustainability information especially value. articles 19a and 29a of directive 2013/34/eu should therefore specify that the sustainability information reported shall include forward-looking and retrospective , and both qualitative and quantitative information that is based on science based , harmonised , comparable and uniform indicators and consistent with the harmonised life cycle assessment. reported sustainability information should also take into account short , medium and long-term time horizons and contain information about the undertaking’s whole value chain , including its own operations , its products and services , its business relationships , and its supply chain , as appropriate. information about the undertaking’s whole value chain would include information related to its value chain within the eu and information that covers third countries if the undertaking’s value chain extends outside the eu.


### (29) articles 19a(1) and 29a(1) of directive 2013/34/eu do not specify whether the information to be reported is to be forward looking or information about past performance. there is currently a lack of forward-looking disclosures , which users of sustainability information especially value. articles 19a and 29a of directive 2013/34/eu should therefore specify that the sustainability information reported shall include forward-looking and retrospective , and both qualitative and quantitative information. reported sustainability information should also take into account short , medium and long-term time horizons and contain information about the undertaking’s whole value chain , including its own operations , its products and services , its business relationships , and its supply chain , as appropriate. information about the undertaking’s whole value chain would include information related to its value chain within the eu and information that covers third countries if the undertaking’s value chain extends outside the eu. ### (29) articles 19a(1) and 29a(1) of directive 2013/34/eu do not specify whether the information to be reported is to be forward looking or retrospective information. there is currently a lack of forward-looking disclosures , which users of sustainability information especially value , but might be sensitive from a perspective of business confidentiality. articles 19a and 29a of directive 2013/34/eu should therefore specify that the sustainability information reported shall include forward-looking and retrospective , and both qualitative and quantitative information , while not endangering the commercial position of the undertaking. reported sustainability information should also take into account short , medium and long-term time horizons and contain information about the undertaking’s whole value chain , including its own operations , its products and services , its business relationships , and its supply chain , as appropriate. information about the undertaking’s whole value chain would include information related to its value chain within the eu and information that covers third countries if the undertaking’s value chain extends outside the eu.


### (29) articles 19a(1) and 29a(1) of directive 2013/34/eu do not specify whether the information to be reported is to be forward looking or information about past performance. there is currently a lack of forward-looking disclosures , which users of sustainability information especially value. articles 19a and 29a of directive 2013/34/eu should therefore specify that the sustainability information reported shall include forward-looking and retrospective , and both qualitative and quantitative information. reported sustainability information should also take into account short , medium and long-term time horizons and contain information about the undertaking’s whole value chain , including its own operations , its products and services , its business relationships , and its supply chain , as appropriate. information about the undertaking’s whole value chain would include information related to its value chain within the eu and information that covers third countries if the undertaking’s value chain extends outside the eu. ### (29) articles 19a(1) and 29a(1) of directive 2013/34/eu do not specify whether the information to be reported is to be forward looking or retrospective information. there is currently a lack of forward-looking disclosures , which users of sustainability information especially value. reported sustainability information could therefore include forward looking information , while not endangering the commercial position of the undertaking , and should also take into account short , medium and long-term time horizons as appropriate.


### (33) no existing standard or framework satisfies the union’s needs for detailed sustainability reporting by itself. information required by directive 2013/34/eu needs to cover information relevant from each of the materiality perspectives , needs to cover all sustainability matters and needs to be aligned , where appropriate , with other obligations under union law to disclose sustainability information , including obligations laid down in regulation (eu) 2020/852 and regulation (eu) 2019/2088. in addition , mandatory sustainability reporting standards for union undertakings must be commensurate with the level of ambition of the european green deal and the union’s climate-neutrality objective for 2050. it is therefore necessary to empower the commission to adopt union sustainability reporting standards , enabling their rapid adoption and ensuring that the content of sustainability reporting standards are consistent with the union’s needs. ### (33) for the development of its own sustainability reporting standards , the union must ensure consistency with equivalent global standards. information required by directive 2013/34/eu needs to cover information relevant from each of the materiality perspectives , and needs to cover all sustainability matters. to avoid duplication of obligations and inconsistencies in definitions , scope and objectives of applicable requirements , sustainability information needs to be consistent , where appropriate , with other obligations under union law to disclose sustainability information , including obligations laid down in regulation (eu) 2020/852 and regulation (eu) 2019/2088. in addition , mandatory sustainability reporting standards for union undertakings must be commensurate with the union's social-economic objectives under article 3(3) of the treaty on european union and the level of ambition of the european green deal and the union’s climate-neutrality objective for 2050. it is therefore necessary to empower the commission to adopt union sustainability reporting standards in view of the development of international standards , enabling their rapid adoption and ensuring that the content of sustainability reporting standards are consistent with the union’s needs.


### (33) no existing standard or framework satisfies the union’s needs for detailed sustainability reporting by itself. information required by directive 2013/34/eu needs to cover information relevant from each of the materiality perspectives , needs to cover all sustainability matters and needs to be aligned , where appropriate , with other obligations under union law to disclose sustainability information , including obligations laid down in regulation (eu) 2020/852 and regulation (eu) 2019/2088. in addition , mandatory sustainability reporting standards for union undertakings must be commensurate with the level of ambition of the european green deal and the union’s climate-neutrality objective for 2050. it is therefore necessary to empower the commission to adopt union sustainability reporting standards , enabling their rapid adoption and ensuring that the content of sustainability reporting standards are consistent with the union’s needs. ### (33) no existing standard or framework satisfies the union’s needs for detailed sustainability reporting by itself. information required by directive 2013/34/eu needs to cover information relevant from each of the materiality perspectives , needs to cover all sustainability matters and needs to be aligned , where appropriate , with other obligations under union law to disclose sustainability information , including obligations laid down in regulation (eu) 2020/852 and regulation (eu) 2019/2088. this information must be based on science based harmonised , comparable and uniform indicators and consistent with the harmonised life cycle assessment. in addition , mandatory sustainability reporting standards for union undertakings must be commensurate with the level of ambition of the european green deal and the union’s climate-neutrality objective for 2050. it is therefore necessary to empower the commission to adopt union sustainability reporting standards , enabling their rapid adoption and ensuring that the content of sustainability reporting standards are consistent with the union’s needs.


### (33) no existing standard or framework satisfies the union’s needs for detailed sustainability reporting by itself. information required by directive 2013/34/eu needs to cover information relevant from each of the materiality perspectives , needs to cover all sustainability matters and needs to be aligned , where appropriate , with other obligations under union law to disclose sustainability information , including obligations laid down in regulation (eu) 2020/852 and regulation (eu) 2019/2088. in addition , mandatory sustainability reporting standards for union undertakings must be commensurate with the level of ambition of the european green deal and the union’s climate-neutrality objective for 2050. it is therefore necessary to empower the commission to adopt union sustainability reporting standards , enabling their rapid adoption and ensuring that the content of sustainability reporting standards are consistent with the union’s needs. ### (33) for developing its own sustainability reporting standards the union should ensure consistency with global equivalent standards. information required by directive 2013/34/eu needs to cover information relevant from each of the materiality perspectives , needs to cover all sustainability matters. to avoid duplication of obligations and inconsistencies in definitions , scope and objectives of applicable requirements , sustainability information needs to be consistent , where appropriate , with other obligations under union law to disclose sustainability information , including obligations laid down in regulation (eu)2020/852 and regulation (eu) 2019/2088. in addition , mandatory sustainability reporting standards for union undertakings must be commensurate with the union’s social-economic objectives under article 3(3) of the treaty on european union and the level of ambition of the european green deal and the union’s climate-neutrality objective for 2050. it is therefore necessary to empower the commission to adopt union sustainability reporting standards in view of the development of international standards , enabling their rapid adoption and ensuring that the content of sustainability reporting standards are consistent with the union’s needs.


### (33) no existing standard or framework satisfies the union’s needs for detailed sustainability reporting by itself. information required by directive 2013/34/eu needs to cover information relevant from each of the materiality perspectives , needs to cover all sustainability matters and needs to be aligned , where appropriate , with other obligations under union law to disclose sustainability information , including obligations laid down in regulation (eu) 2020/852 and regulation (eu) 2019/2088. in addition , mandatory sustainability reporting standards for union undertakings must be commensurate with the level of ambition of the european green deal and the union’s climate-neutrality objective for 2050. it is therefore necessary to empower the commission to adopt union sustainability reporting standards , enabling their rapid adoption and ensuring that the content of sustainability reporting standards are consistent with the union’s needs. ### (33) no existing standard or framework satisfies the union’s needs for detailed sustainability reporting by itself. information required by directive 2013/34/eu needs to cover information relevant from each of the materiality perspectives , needs to cover all sustainability matters and needs to be aligned , where appropriate , with other obligations under union law to disclose sustainability information , including obligations laid down in regulation (eu) 2020/852 and regulation (eu) 2019/2088. this information must be based on science based , harmonised comparable and uniform indicators and consistent with the harmonised life cycle assessment. in addition , mandatory sustainability reporting standards for union undertakings must be commensurate with the level of ambition of the european green deal and the union’s climate-neutrality objective for 2050. it is therefore necessary to empower the commission to adopt union sustainability reporting standards , enabling their rapid adoption and ensuring that the content of sustainability reporting standards are consistent with the union’s needs.


### (33) no existing standard or framework satisfies the union’s needs for detailed sustainability reporting by itself. information required by directive 2013/34/eu needs to cover information relevant from each of the materiality perspectives , needs to cover all sustainability matters and needs to be aligned , where appropriate , with other obligations under union law to disclose sustainability information , including obligations laid down in regulation (eu) 2020/852 and regulation (eu) 2019/2088. in addition , mandatory sustainability reporting standards for union undertakings must be commensurate with the level of ambition of the european green deal and the union’s climate-neutrality objective for 2050. it is therefore necessary to empower the commission to adopt union sustainability reporting standards , enabling their rapid adoption and ensuring that the content of sustainability reporting standards are consistent with the union’s needs. ### (33) leading on the development of sustainability reporting standards , the european union can contribute to the development of globally uniform standards. information required by directive 2013/34/eu needs to cover information relevant from each of the materiality perspectives , needs to cover sustainability matters and needs to be aligned , and consistent , in order to avoid duplication of obligations and inconsistencies in definitions , scope , objectives and application requirements. this makes it necessary to develop one set of reporting standards for undertakings with an average number of employees in excess of 500 that bring recent requirements together in one form. in addition , mandatory sustainability reporting standards for union undertakings must be commensurate with the level of ambition of the european green deal and the union’s climate-neutrality objective for 2050. it is therefore necessary to empower the commission to adopt union sustainability reporting standards , not exceeding the ambitions in international standard setting , enabling their rapid adoption and ensuring that the content of sustainability reporting standards are consistent with the union’s needs.


### (33) no existing standard or framework satisfies the union’s needs for detailed sustainability reporting by itself. information required by directive 2013/34/eu needs to cover information relevant from each of the materiality perspectives , needs to cover all sustainability matters and needs to be aligned , where appropriate , with other obligations under union law to disclose sustainability information , including obligations laid down in regulation (eu) 2020/852 and regulation (eu) 2019/2088. in addition , mandatory sustainability reporting standards for union undertakings must be commensurate with the level of ambition of the european green deal and the union’s climate-neutrality objective for 2050. it is therefore necessary to empower the commission to adopt union sustainability reporting standards , enabling their rapid adoption and ensuring that the content of sustainability reporting standards are consistent with the union’s needs. ### (33) information required by directive 2013/34/eu needs to cover information relevant from each of the materiality perspectives , needs to cover sustainability matters and needs to be aligned and correlated with the entire eu acquis. in addition , mandatory sustainability reporting standards for large union undertakings must be commensurate with the level of ambition of the european green deal and the union’s climate-neutrality objective for 2050. it is therefore necessary to empower the commission to adopt union sustainability reporting standards , enabling their rapid adoption and ensuring that the content of sustainability reporting standards are consistent with the union’s needs and with international standards , but without imposing supplementary administrative and financial burdens on european business and without affecting competitiveness and fair competition in the internal market.


### (33) no existing standard or framework satisfies the union’s needs for detailed sustainability reporting by itself. information required by directive 2013/34/eu needs to cover information relevant from each of the materiality perspectives , needs to cover all sustainability matters and needs to be aligned , where appropriate , with other obligations under union law to disclose sustainability information , including obligations laid down in regulation (eu) 2020/852 and regulation (eu) 2019/2088. in addition , mandatory sustainability reporting standards for union undertakings must be commensurate with the level of ambition of the european green deal and the union’s climate-neutrality objective for 2050. it is therefore necessary to empower the commission to adopt union sustainability reporting standards , enabling their rapid adoption and ensuring that the content of sustainability reporting standards are consistent with the union’s needs. ### (33) for the development of its own sustainability reporting standards , the union must ensure consistency with equivalent global standards. information required by directive 2013/34/eu needs to cover information relevant from each of the materiality perspectives , and needs to cover all sustainability matters. to avoid duplication of obligations and inconsistencies in definitions , scope and objectives of applicable requirements sustainability information need to be consistent , where appropriate , with other obligations under union law to disclose sustainability information , including obligations laid down in regulation (eu) 2020/852 and regulation (eu) 2019/2088. in addition , mandatory sustainability reporting standards for union undertakings must be commensurate with the level of ambition of the european green deal and the union’s climate-neutrality objective for 2050. it is therefore necessary to empower the commission to adopt union sustainability reporting standards in light of the development of international standards , enabling their rapid adoption and ensuring that the content of sustainability reporting standards are consistent with the union’s needs.


### (33) no existing standard or framework satisfies the union’s needs for detailed sustainability reporting by itself. information required by directive 2013/34/eu needs to cover information relevant from each of the materiality perspectives , needs to cover all sustainability matters and needs to be aligned , where appropriate , with other obligations under union law to disclose sustainability information , including obligations laid down in regulation (eu) 2020/852 and regulation (eu) 2019/2088. in addition , mandatory sustainability reporting standards for union undertakings must be commensurate with the level of ambition of the european green deal and the union’s climate-neutrality objective for 2050. it is therefore necessary to empower the commission to adopt union sustainability reporting standards , enabling their rapid adoption and ensuring that the content of sustainability reporting standards are consistent with the union’s needs. ### (33) leading on the development of sustainability reporting standards , the union can contribute to the development of globally uniform standards. information required by directive 2013/34/eu needs to cover information relevant from each of the materiality perspectives , needs to cover sustainability matters and needs to be aligned , and consistent , in order to avoid duplication of obligations and inconsistencies in definitions , scope , objectives and application requirements. this makes it necessary to develop one set of reporting standards for undertakings with an average number of employees in excess of 500 that bring recent requirements together in one form. in addition , mandatory sustainability reporting standards for union undertakings must be commensurate with the level of ambition of the european green deal and the union’s climate-neutrality objective for 2050. it is therefore necessary to empower the commission to adopt union sustainability reporting standards , not exceeding the ambitions in international standard setting , enabling their rapid adoption and ensuring that the content of sustainability reporting standards are consistent with the union’s needs.


### (34) the european financial reporting advisory group (efrag) is a non-profit association established under belgian law that serves the public interest by providing advice to the commission on the endorsement of international financial reporting standards. efrag has established a reputation as a european centre of expertise on corporate reporting , and is well placed to foster coordination between european sustainability reporting standards and international initiatives that seek to develop standards that are consistent across the world. in march 2021 , a multi-stakeholder task force set up by efrag published recommendations for the possible development of sustainability reporting standards for the european union. those recommendations contain proposals to develop a coherent and comprehensive set of reporting standards , covering all sustainability matters from a double-materiality perspective. those recommendations also contain a detailed roadmap for developing such standards , and proposals for mutually reinforcing cooperation between global standard-setting initiatives and standard-setting initiatives of the european union. in march 2021 , the efrag president published recommendations for possible governance changes to efrag if it were to be asked to develop technical advice about sustainability reporting standards. these recommendations include offsetting up within efrag a new sustainability reporting pillar while not significantly modifying the existing financial reporting pillar. when adopting sustainability reporting standards , the commission should take account of technical advice that efrag will develop. in order to ensure high-quality standards that contribute to the european public good and meet the needs of undertakings and of users of the information reported , efrag’s technical advice should be developed with proper due process , public oversight and transparency , accompanied by cost benefit analyses , and be developed with the expertise of relevant stakeholders. to ensure that union sustainability reporting standards take account of the views of the member states of the union , before adopting the standards the commission should consult the member state expert group on sustainable finance referred to in article 24 of regulation (eu) 2020/852 on efrag’s technical advice. the european securities and markets authority (esma) plays a role in drafting regulatory technical standards pursuant to regulation (eu) 2019/2088 and there needs to be coherence between those regulatory technical standards and sustainability reporting standards. according to regulation (eu) no 1095/2010 of the european parliament and of the council54 , esma also plays a role in promoting supervisory converge in the enforcement of corporate reporting by issuers whose securities are listed on eu regulated markets and who will be required to use these sustainability reporting standards. therefore , esma should be required to provide an opinion on efrag’s technical advice. this opinion should be provided within two months from the date of receipt of the request from the commission. in addition , the commission should consult the european banking authority , the european insurance and occupational pensions authority , the european environment agency , the european union agency for fundamental rights , the european central bank , the committee of european auditing oversight bodies and the platform on sustainable finance to ensure that the sustainability reporting standards are coherent with relevant union policy and legislation. where any of those bodies decide to submit an opinion , they shall do so within two months from the date of being consulted by the commission. ### (34) the european financial reporting advisory group (efrag) is a non-profit association established under belgian law that serves the public interest by providing advice to the commission on the endorsement of international financial reporting standards. efrag has established a reputation as a european centre of expertise on corporate reporting , and is well placed to foster coordination between european sustainability reporting standards and international initiatives that seek to develop standards that are consistent across the world. in march 2021 , a multi-stakeholder task force set up by efrag published recommendations for the possible development of sustainability reporting standards for the european union. those recommendations contain proposals to develop a coherent and comprehensive set of reporting standards , covering all sustainability matters from a double-materiality perspective. those recommendations also contain a detailed roadmap for developing such standards , and proposals for mutually reinforcing cooperation between global standard-setting initiatives and standard-setting initiatives of the european union. in march 2021 , the efrag president published recommendations for possible governance changes to efrag if it were to be asked to develop technical advice about sustainability reporting standards. these recommendations include offsetting up within efrag a new sustainability reporting pillar while not significantly modifying the existing financial reporting pillar. when adopting sustainability reporting standards , the commission should take account of technical advice that efrag will develop. in order to ensure high-quality standards that contribute to the european public good and meet the needs of undertakings and of users of the information reported , efrag’s technical advice should be developed with proper due process , public oversight and transparency , accompanied by cost benefit analyses , and be developed with the expertise of relevant stakeholders. to ensure that union sustainability reporting standards take account of the views of the member states of the union , before adopting the standards the commission should consult the member state expert group on sustainable finance referred to in article 24 of regulation (eu) 2020/852 on efrag’s technical advice. the european securities and markets authority (esma) plays a role in drafting regulatory technical standards pursuant to regulation (eu) 2019/2088 and there needs to be coherence between those regulatory technical standards and sustainability reporting standards. according to regulation (eu) no 1095/2010 of the european parliament and of the council54 , esma also plays a role in promoting supervisory converge in the enforcement of corporate reporting by issuers whose securities are listed on eu regulated markets and who will be required to use these sustainability reporting standards. therefore , esma should be required to provide an opinion on efrag’s technical advice. this opinion should be provided within three months from the date of receipt of the request from the commission. in addition , the commission should consult the european banking authority , the european insurance and occupational pensions authority , the european environment agency , the european union agency for fundamental rights , the european central bank , the committee of european auditing oversight bodies and the platform on sustainable finance to ensure that the sustainability reporting standards are coherent with relevant union policy and legislation. also the expertise and opinion of the international sustainability standards board (issb) of the international financial reporting standard (ifrs) foundation should be taken into account. where any of those bodies decide to submit an opinion , they shall do so within three months from the date of being consulted by the commission.


### (36) sustainability reporting standards should take account of the commission guidelines on non-financial reporting60 and the commission guidelines on reporting climate-related information61. they should also take account of other reporting requirements in directive 2013/34/eu not directly related to sustainability , with the aim of providing the users of the reported information with a better understanding of the development , performance , position and impact of the undertaking , by maximising the links between the sustainability information and other information reported in accordance with directive 2013/34/eu. ### (36) sustainability reporting standards should take account of the commission guidelines on non-financial reporting60 and the commission guidelines on reporting climate-related information61 , including the kpis included in these guidelines. they should also take account of other reporting requirements in directive 2013/34/eu not directly related to sustainability , with the aim of providing the users of the reported information with a better understanding of the development , performance , position and impact of the undertaking , by maximising the links between the sustainability information and other information reported in accordance with directive 2013/34/eu.


### (36) sustainability reporting standards should take account of the commission guidelines on non-financial reporting60 and the commission guidelines on reporting climate-related information61 . they should also take account of other reporting requirements in directive 2013/34/eu not directly related to sustainability , with the aim of providing the users of the reported information with a better understanding of the development , performance , position and impact of the undertaking , by maximising the links between the sustainability information and other information reported in accordance with directive 2013/34/eu. ### (36) sustainability reporting standards should take account of the commission guidelines on non-financial reporting60 and the commission guidelines on reporting climate-related information61 including the kpis already included in these guidelines. they should also take account of other reporting requirements in directive 2013/34/eu not directly related to sustainability , with the aim of providing the users of the reported information with a better understanding of the development , performance , position and impact of the undertaking , by maximising the links between the sustainability information and other information reported in accordance with directive 2013/34/eu.


### (37) sustainability reporting standards should be proportionate , and should not impose unnecessary administrative burden on companies that are required to use them. in order to minimise disruption for undertakings that already report sustainability information , sustainability reporting standards should take account of existing standards and frameworks for sustainability reporting and accounting where appropriate. those include the global reporting initiative , the sustainability accounting standards board , the international integrated reporting council , the international accounting standards board , the task force on climate-related financial disclosures , the carbon disclosure standards board , and cdp (formerly the carbon disclosure project). standards of the european union should take account of any sustainability reporting standards developed under the auspices of international financial reporting standards foundation. to avoid unnecessary regulatory fragmentation that may have negative consequences for undertakings operating globally , european standards should contribute to the process of convergence of sustainability reporting standards at global level. ### (37) sustainability reporting standards should be proportionate , and should not impose unnecessary administrative burden on companies that are required to use them. in order to minimise disruption for undertakings that already report sustainability information , sustainability reporting standards should ensure consistency with existing standards and frameworks for sustainability reporting and accounting where appropriate. those include the global reporting initiative , the sustainability accounting standards board , the international integrated reporting council , the international accounting standards board , the task force on climate-related financial disclosures , the carbon disclosure standards board , and cdp (formerly the carbon disclosure project). standards of the european union should take account of any sustainability reporting standards developed under the auspices of international financial reporting standards foundation. to avoid unnecessary regulatory fragmentation that may have negative consequences for undertakings operating globally , european standards should be based , as far as possible , on global equivalent sustainable reporting standards.


### (37) sustainability reporting standards should be proportionate , and should not impose unnecessary administrative burden on companies that are required to use them. in order to minimise disruption for undertakings that already report sustainability information , sustainability reporting standards should take account of existing standards and frameworks for sustainability reporting and accounting where appropriate. those include the global reporting initiative , the sustainability accounting standards board , the international integrated reporting council , the international accounting standards board , the task force on climate-related financial disclosures , the carbon disclosure standards board , and cdp (formerly the carbon disclosure project). standards of the european union should take account of any sustainability reporting standards developed under the auspices of international financial reporting standards foundation. to avoid unnecessary regulatory fragmentation that may have negative consequences for undertakings operating globally , european standards should contribute to the process of convergence of sustainability reporting standards at global level. ### (37) sustainability reporting standards should be proportionate , and should not impose unnecessary administrative burden on companies that are required to use them. in order to minimise disruption for undertakings that already report sustainability information , sustainability reporting standards should ensure consistency with existing standards and frameworks for sustainability reporting and accounting where appropriate. those include the global reporting initiative , the sustainability accounting standards board , the international integrated reporting council , the international accounting standards board , the task force on climate-related financial disclosures , the carbon disclosure standards board , and cdp (formerly the carbon disclosure project). standards of the european union should take account of any sustainability reporting standards developed under the auspices of international financial reporting standards foundation , in particular of the international sustainability standards board (issb). to avoid unnecessary regulatory fragmentation that may have negative consequences for undertakings operating globally , european standards should contribute to the process of convergence of sustainability reporting standards at global level. the eu sustainability standards should be based , as far as possible , on global equivalent sustainable reporting standards.


### (37) sustainability reporting standards should be proportionate , and should not impose unnecessary administrative burden on companies that are required to use them. in order to minimise disruption for undertakings that already report sustainability information , sustainability reporting standards should take account of existing standards and frameworks for sustainability reporting and accounting where appropriate. those include the global reporting initiative , the sustainability accounting standards board , the international integrated reporting council , the international accounting standards board , the task force on climate-related financial disclosures , the carbon disclosure standards board , and cdp (formerly the carbon disclosure project). standards of the european union should take account of any sustainability reporting standards developed under the auspices of international financial reporting standards foundation. to avoid unnecessary regulatory fragmentation that may have negative consequences for undertakings operating globally , european standards should contribute to the process of convergence of sustainability reporting standards at global level. ### (37) sustainability reporting standards should be proportionate , and should not impose unnecessary administrative burden and cost on companies that are required to use them. in order to minimise disruption for undertakings that already report sustainability information , sustainability reporting standards need to be consistent and in line with existing standards and frameworks for sustainability reporting and accounting where appropriate. standards of the european union should take account of any sustainability reporting standards developed under the auspices of ifrs foundation , and in particular the issb. to avoid unnecessary regulatory fragmentation that may have negative consequences for undertakings operating globally , european standards should contribute to the process of convergence of sustainability reporting standards at global level.


### (37) sustainability reporting standards should be proportionate , and should not impose unnecessary administrative burden on companies that are required to use them. in order to minimise disruption for undertakings that already report sustainability information , sustainability reporting standards should take account of existing standards and frameworks for sustainability reporting and accounting where appropriate. those include the global reporting initiative , the sustainability accounting standards board , the international integrated reporting council , the international accounting standards board , the task force on climate-related financial disclosures , the carbon disclosure standards board , and cdp (formerly the carbon disclosure project). standards of the european union should take account of any sustainability reporting standards developed under the auspices of international financial reporting standards foundation. to avoid unnecessary regulatory fragmentation that may have negative consequences for undertakings operating globally , european standards should contribute to the process of convergence of sustainability reporting standards at global level. ### (37) sustainability reporting standards should be proportionate , and should not impose unnecessary administrative burden on companies that are required to use them. in order to minimise disruption for undertakings that already report sustainability information , sustainability reporting standards should ensure consistency with existing standards and frameworks for sustainability reporting and accounting where appropriate. those include the global reporting initiative , the sustainability accounting standards board , the international integrated reporting council , the international accounting standards board , the task force on climate-related financial disclosures , the carbon disclosure standards board , and cdp (formerly the carbon disclosure project). standards of the european union should take account of any sustainability reporting standards developed under the auspices of international financial reporting standards foundation. to avoid unnecessary regulatory fragmentation that may have negative consequences for undertakings operating globally , european standards should be based on , as far as possible , global equivalent sustainable reporting standards.


### (38) in its communication on the european green deal , the european commission committed to support businesses and other stakeholders in developing standardised natural capital accounting practices within the union and internationally , with the aim of ensuring appropriate management of environmental risks and mitigation opportunities , and reduce related transaction costs. the transparent project sponsored under the life programme is developing the first natural capital accounting methodology , which will make existing methods easier to compare and more transparent while lowering the threshold for companies to adopt and use the systems in support of future-proofing their business. the natural capital protocol is also an important reference in this field. while natural capital accounting methods serve principally to strengthen internal management decisions , they should be duly considered when establishing sustainability reporting standards. some natural capital accounting methodologies seek to assign a monetary value to the environmental impacts of companies’ activities , which may help users to better understand those impacts. it is therefore appropriate that sustainability reporting standards should be able to include monetised indicators of sustainability impacts if that is deemed necessary. ### deleted


### (39) sustainability reporting standards should also take account of internationally recognised principles and frameworks on responsible business conduct , corporate social responsibility , and sustainable development , including the un sustainable development goals , the un guiding principles on business and human rights , the oecd guidelines for multinational enterprises , the oecd due diligence guidance for responsible business conduct and related sectoral guidelines , the un global compact , the tripartite declaration of principles of the international labour organisation concerning multinational enterprises and social policy , the iso 26000 standard on social responsibility , and the un principles for responsible investment. ### deleted


### (40) it should be ensured that the information reported by undertakings in accordance with the sustainability reporting standards meet the needs of users. the reporting standards should therefore specify the information that undertakings are to disclose on all major environmental factors , including their impacts and dependencies on climate , air , land , water and biodiversity. regulation (eu) 2020/852 provides a classification of the environmental objectives of the union. for reasons of coherence , it is appropriate to use a similar classification to identify the environmental factors that should be addressed by sustainability reporting standards. the reporting standards should consider and specify any geographical or other contextual information that undertakings should disclose to provide an understanding of their principal impacts on sustainability matters and the principal risks to the undertaking arising from sustainability matters. ### (40) it should be ensured that the information reported by undertakings in accordance with the sustainability reporting standards meet the needs of users. the reporting standards should therefore specify the information that undertakings are to disclose on all major environmental factors , including their impacts and dependencies on climate , air , land , water and biodiversity , specifying , if any of its activities cause significant harm (dnsh) to these environmental factors. regulation (eu) 2020/852 provides a classification of the environmental objectives of the union. for reasons of coherence , it is appropriate to use a similar classification to identify the environmental factors that should be addressed by sustainability reporting standards. the reporting standards should consider and specify any geographical or other contextual information that undertakings should disclose to provide an understanding of their principal impacts on sustainability matters and the principal risks to the undertaking arising from sustainability matters.


### (40) it should be ensured that the information reported by undertakings in accordance with the sustainability reporting standards meet the needs of users. the reporting standards should therefore specify the information that undertakings are to disclose on all major environmental factors , including their impacts and dependencies on climate , air , land , water and biodiversity. regulation (eu) 2020/852 provides a classification of the environmental objectives of the union. for reasons of coherence , it is appropriate to use a similar classification to identify the environmental factors that should be addressed by sustainability reporting standards. the reporting standards should consider and specify any geographical or other contextual information that undertakings should disclose to provide an understanding of their principal impacts on sustainability matters and the principal risks to the undertaking arising from sustainability matters. ### (40) it should be ensured that the information reported by undertakings in accordance with the sustainability reporting standards meet the needs of users. the reporting standards should therefore specify the information that undertakings are to disclose on all major environmental factors , including their impacts and dependencies on climate , air , land , water and biodiversity. regulation (eu) 2020/852 provides a classification of the environmental objectives of the union. for reasons of coherence , it is appropriate to use a similar classification to identify the environmental factors that should be addressed by sustainability reporting standards. the reporting standards should consider and specify any geographical or other contextual information that undertakings should disclose to provide an understanding of their principal impacts on sustainability matters and the principal risks to the undertaking arising from sustainability matters , including from the implementation of eu policies on climate change mitigation and energy transition.


### (40) it should be ensured that the information reported by undertakings in accordance with the sustainability reporting standards meet the needs of users. the reporting standards should therefore specify the information that undertakings are to disclose on all major environmental factors , including their impacts and dependencies on climate , air , land , water and biodiversity. regulation (eu) 2020/852 provides a classification of the environmental objectives of the union. for reasons of coherence , it is appropriate to use a similar classification to identify the environmental factors that should be addressed by sustainability reporting standards. the reporting standards should consider and specify any geographical or other contextual information that undertakings should disclose to provide an understanding of their principal impacts on sustainability matters and the principal risks to the undertaking arising from sustainability matters. ### (40) it should be ensured that the information reported by undertakings in accordance with the sustainability reporting standards meet the needs of users and do not place a disproportionate burden in effort and costs on those reporting. . the reporting standards should therefore specify the information that undertakings are to disclose on major environmental factors. regulation (eu) 2020/852 provides a classification of the environmental objectives of the union.


### (40) it should be ensured that the information reported by undertakings in accordance with the sustainability reporting standards meet the needs of users. the reporting standards should therefore specify the information that undertakings are to disclose on all major environmental factors , including their impacts and dependencies on climate , air , land , water and biodiversity. regulation (eu) 2020/852 provides a classification of the environmental objectives of the union. for reasons of coherence , it is appropriate to use a similar classification to identify the environmental factors that should be addressed by sustainability reporting standards. the reporting standards should consider and specify any geographical or other contextual information that undertakings should disclose to provide an understanding of their principal impacts on sustainability matters and the principal risks to the undertaking arising from sustainability matters. ### (40) it should be ensured that the information reported by undertakings in accordance with the sustainability reporting standards meet the needs of users and do not place a disproportionate burden in effort and costs on those reporting. the reporting standards should therefore specify the information that undertakings are to disclose on major environmental factors. regulation (eu) 2020/852 provides a classification of the environmental objectives of the union.


### (43) sustainability reporting standards should specify the information that undertakings should disclose on social factors , including employee factors and human rights. such information should cover the impacts of undertakings on people , including on human health. the information that undertakings disclose about human rights should include information about forced labour in their value chains where relevant. reporting standards that address social factors should specify the information that undertakings should disclose with regard to the principles of the european pillar of social rights that are relevant to businesses , including equal opportunities for all and working conditions. the european pillar of social rights action plan adopted in march 2021 calls for stronger requirements on undertakings to report on social issues. the reporting standards should also specify the information that undertakings should disclose with regard to the human rights , fundamental freedoms , democratic principles and standards established in the international bill of human rights and other core un human rights conventions , the international labour organization’s declaration on fundamental principles and rights at work , the fundamental conventions of the international labour organisation , and the charter of fundamental rights of the european union. ### (43) sustainability reporting standards should specify the information that undertakings should disclose on social factors , including employee factors and human rights. such information should cover the impacts of undertakings on people , including on human health. the information that undertakings disclose about human rights should include information about forced labour in their value chains where relevant , , but in no way should such reports replace the public authorities’ responsibility to address import of goods , produced as result of human rights abuses , including forced labour , by trade policy and diplomacy means. reporting standards that address social factors should specify the information that undertakings should disclose with regard to the principles of the european pillar of social rights that are relevant to businesses , including equal opportunities for all and working conditions. the european pillar of social rights action plan adopted in march 2021 calls for stronger requirements on undertakings to report on social issues. the reporting standards should also specify the information that undertakings should disclose with regard to the human rights , fundamental freedoms , democratic principles and standards established in the international bill of human rights and other core un human rights conventions , the international labour organization’s declaration on fundamental principles and rights at work , the fundamental conventions of the international labour organisation , and the charter of fundamental rights of the european union and the un convention on the rights of persons with disabilities. the reporting on social factors should be proportionate to the scope and goals of this directive , thus limited to essential rights and freedoms along the value chain.


### (43) sustainability reporting standards should specify the information that undertakings should disclose on social factors , including employee factors and human rights. such information should cover the impacts of undertakings on people , including on human health. the information that undertakings disclose about human rights should include information about forced labour in their value chains where relevant. reporting standards that address social factors should specify the information that undertakings should disclose with regard to the principles of the european pillar of social rights that are relevant to businesses , including equal opportunities for all and working conditions. the european pillar of social rights action plan adopted in march 2021 calls for stronger requirements on undertakings to report on social issues. the reporting standards should also specify the information that undertakings should disclose with regard to the human rights , fundamental freedoms , democratic principles and standards established in the international bill of human rights and other core un human rights conventions , the international labour organization’s declaration on fundamental principles and rights at work , the fundamental conventions of the international labour organisation , and the charter of fundamental rights of the european union. ### (43) sustainability reporting standards should specify the information that undertakings should disclose on social factors , including employee factors and human rights. such information should cover the impacts of undertakings on people. the information that undertakings disclose about human rights should include information about forced labour in their value chains where relevant. reporting standards that address social factors should specify the information that undertakings should disclose with regard to the principles of the european pillar of social rights that are relevant to businesses , including equal opportunities for all and working conditions. the european pillar of social rights action plan adopted in march 2021 calls for stronger requirements on undertakings to report on social issues. the reporting standards should also specify the information that undertakings should disclose with regard to the human rights , fundamental freedoms , democratic principles and standards established in the international bill of human rights and other core un human rights conventions , the international labour organization’s declaration on fundamental principles and rights at work , the fundamental conventions of the international labour organisation , and the charter of fundamental rights of the european union.


### (43) sustainability reporting standards should specify the information that undertakings should disclose on social factors , including employee factors and human rights. such information should cover the impacts of undertakings on people , including on human health. the information that undertakings disclose about human rights should include information about forced labour in their value chains where relevant. reporting standards that address social factors should specify the information that undertakings should disclose with regard to the principles of the european pillar of social rights that are relevant to businesses , including equal opportunities for all and working conditions. the european pillar of social rights action plan adopted in march 2021 calls for stronger requirements on undertakings to report on social issues. the reporting standards should also specify the information that undertakings should disclose with regard to the human rights , fundamental freedoms , democratic principles and standards established in the international bill of human rights and other core un human rights conventions , the international labour organization’s declaration on fundamental principles and rights at work , the fundamental conventions of the international labour organisation , and the charter of fundamental rights of the european union. ### (43) sustainability reporting standards should specify the information that undertakings should disclose on social factors , including employee factors and human rights. such information should cover the impacts of undertakings on people , including on human health. the information that undertakings disclose about human rights should include information about forced labour in their value chains where relevant , but in no way should such reports replace the public authorities’ responsibility to address import of goods , produced as result of human rights abuses , including forced labour , by trade policy and diplomacy means. reporting standards that address social factors should specify the information that undertakings should disclose with regard to the principles of the european pillar of social rights that are relevant to businesses , including equal opportunities for all and working conditions. the european pillar of social rights action plan adopted in march2021 calls for stronger requirements on undertakings to report on social issues. the reporting standards should also specify the information that undertakings should disclose with regard to the human rights , fundamental freedoms , democratic principles and standards established in the international bill of human rights and other core un human rights conventions , the international labour organization’s declaration on fundamental principles and rights at work , the fundamental conventions of the international labour organisation , and the charter of fundamental rights of the european union the reporting on social factors should be proportionate to the scope and goals of this directive , thus limited to essential rights and freedoms along the value chain.


### (43) sustainability reporting standards should specify the information that undertakings should disclose on social factors , including employee factors and human rights. such information should cover the impacts of undertakings on people , including on human health. the information that undertakings disclose about human rights should include information about forced labour in their value chains where relevant. reporting standards that address social factors should specify the information that undertakings should disclose with regard to the principles of the european pillar of social rights that are relevant to businesses , including equal opportunities for all and working conditions. the european pillar of social rights action plan adopted in march 2021 calls for stronger requirements on undertakings to report on social issues. the reporting standards should also specify the information that undertakings should disclose with regard to the human rights , fundamental freedoms , democratic principles and standards established in the international bill of human rights and other core un human rights conventions , the international labour organization’s declaration on fundamental principles and rights at work , the fundamental conventions of the international labour organisation , and the charter of fundamental rights of the european union. ### (43) sustainability reporting standards should specify the information that undertakings should disclose on social factors , including employee factors and human rights. such information should cover the impacts of undertakings on people , including on human health. reporting standards that address social factors should specify the information that undertakings should disclose with regard to the principles of the european pillar of social rights that are relevant to businesses , including equal opportunities for all and working conditions. the european pillar of social rights action plan adopted in march 2021 calls for stronger requirements on undertakings to report on social issues. the reporting standards should also specify the information that undertakings should disclose where relevant with regard to the human rights , fundamental freedoms , democratic principles and standards established in the international bill of human rights and other core un human rights conventions , the international labour organization’s declaration on fundamental principles and rights at work , the fundamental conventions of the international labour organisation , and the charter of fundamental rights of the european union.


### (43) sustainability reporting standards should specify the information that undertakings should disclose on social factors , including employee factors and human rights. such information should cover the impacts of undertakings on people , including on human health. the information that undertakings disclose about human rights should include information about forced labour in their value chains where relevant. reporting standards that address social factors should specify the information that undertakings should disclose with regard to the principles of the european pillar of social rights that are relevant to businesses , including equal opportunities for all and working conditions. the european pillar of social rights action plan adopted in march 2021 calls for stronger requirements on undertakings to report on social issues. the reporting standards should also specify the information that undertakings should disclose with regard to the human rights , fundamental freedoms , democratic principles and standards established in the international bill of human rights and other core un human rights conventions , the international labour organization’s declaration on fundamental principles and rights at work , the fundamental conventions of the international labour organisation , and the charter of fundamental rights of the european union. ### (43) sustainability reporting standards should specify the information that undertakings should disclose on social factors , including employee factors , inclusion measures and human rights. such information should cover the impacts of undertakings on people , including on human health. the information that undertakings disclose about human rights should include information about forced labour in their value chains where relevant. reporting standards that address social factors should specify the information that undertakings should disclose with regard to the principles of the european pillar of social rights that are relevant to businesses , including equal opportunities for all and working conditions. the european pillar of social rights action plan adopted in march 2021 calls for stronger requirements on undertakings to report on social issues. the reporting standards should also specify the information that undertakings should disclose with regard to the human rights , fundamental freedoms , democratic principles and standards established in the international bill of human rights and other core un human rights conventions , such as the convention on the rights of persons with disabilities , the international labour organization’s declaration on fundamental principles and rights at work , the fundamental conventions of the international labour organisation , and the charter of fundamental rights of the european union.


### (43) sustainability reporting standards should specify the information that undertakings should disclose on social factors , including employee factors and human rights. such information should cover the impacts of undertakings on people , including on human health. the information that undertakings disclose about human rights should include information about forced labour in their value chains where relevant. reporting standards that address social factors should specify the information that undertakings should disclose with regard to the principles of the european pillar of social rights that are relevant to businesses , including equal opportunities for all and working conditions. the european pillar of social rights action plan adopted in march 2021 calls for stronger requirements on undertakings to report on social issues. the reporting standards should also specify the information that undertakings should disclose with regard to the human rights , fundamental freedoms , democratic principles and standards established in the international bill of human rights and other core un human rights conventions , the international labour organization’s declaration on fundamental principles and rights at work , the fundamental conventions of the international labour organisation , and the charter of fundamental rights of the european union. ### (43) sustainability reporting standards should specify the information that undertakings should disclose on social factors , measures for inclusion including employee factors and human rights. such information should cover the impacts of undertakings on people , including on human health. the information that undertakings disclose about human rights should include information about forced labour in their value chains where relevant. reporting standards that address social factors should specify the information that undertakings should disclose with regard to the principles of the european pillar of social rights that are relevant to businesses , including equal opportunities for all - regardless of gender , racial or ethnic origin , religion or belief , disability , age or sexual orientation - and working conditions. the european pillar of social rights action plan adopted in march 2021 calls for stronger requirements on undertakings to report on social issues. the reporting standards should also specify the information that undertakings should disclose with regard to the human rights , fundamental freedoms , democratic principles and standards established in the international bill of human rights and other core un human rights conventions , such as the un convention on the rights of persons with disabilities , the international labour organization’s declaration on fundamental principles and rights at work , the fundamental conventions of the international labour organisation , and the charter of fundamental rights of the european union.


### (43) sustainability reporting standards should specify the information that undertakings should disclose on social factors , including employee factors and human rights. such information should cover the impacts of undertakings on people , including on human health. the information that undertakings disclose about human rights should include information about forced labour in their value chains where relevant. reporting standards that address social factors should specify the information that undertakings should disclose with regard to the principles of the european pillar of social rights that are relevant to businesses , including equal opportunities for all and working conditions. the european pillar of social rights action plan adopted in march 2021 calls for stronger requirements on undertakings to report on social issues. the reporting standards should also specify the information that undertakings should disclose with regard to the human rights , fundamental freedoms , democratic principles and standards established in the international bill of human rights and other core un human rights conventions , the international labour organization’s declaration on fundamental principles and rights at work , the fundamental conventions of the international labour organisation , and the charter of fundamental rights of the european union. ### (43) sustainability reporting standards should specify the information that undertakings should disclose on social factors , including employee factors and human rights. the information that undertakings disclose about human rights should include information about forced labour in their value chains where relevant. reporting standards that address social factors should specify the information that undertakings should disclose with regard to the principles of the european pillar of social rights that are relevant to businesses , including equal opportunities for all and working conditions. the european pillar of social rights action plan adopted in march 2021 calls for stronger requirements on undertakings to report on social issues. the reporting standards should also specify the information that undertakings should disclose with regard to the human rights , fundamental freedoms , democratic principles and standards established in the international bill of human rights and other core un human rights conventions , the international labour organization’s declaration on fundamental principles and rights at work , the fundamental conventions of the international labour organisation , and the charter of fundamental rights of the european union.


### (47) to meet the information needs from users in a timely manner , and in particular given the urgency to meet the information needs of financial market participants subject to the requirements laid down in the delegated acts adopted pursuant to article 4 , paragraphs 6 and 7 of regulation (eu) 2019/2088 , the commission should adopt a first set of reporting standards by 31 october 2022. that set of reporting standards should specify the information that undertakings should disclose with regard to all reporting areas and sustainability matters , and that financial market participants need to comply with the disclosure obligations laid down in regulation (eu) 2019/2088. the commission should adopt a second set of reporting standards at the latest by 31 october 2023 , specifying complementary information that undertakings should disclose about sustainability matters and reporting areas where necessary , and information that is specific to the sector in which an undertaking operates. the commission should review the standards every 3 years to take account of relevant developments , including the development of international standards. ### (47) to meet the information needs from users in a timely manner , and in particular given the urgency to meet the information needs of financial market participants subject to the requirements laid down in the delegated acts adopted pursuant to article 4 , paragraphs 6 and 7 of regulation (eu) 2019/2088 , the commission should adopt a first set of reporting standards by 31 october 2023. that set of reporting standards should specify the information that undertakings should disclose with regard to all reporting areas and sustainability matters , and that financial market participants need to comply with the disclosure obligations laid down in regulation (eu) 2019/2088. the commission should adopt a second set of reporting standards at the latest by 31 october 2024 , specifying complementary information that undertakings should disclose about sustainability matters and reporting areas where necessary , and information that is specific to the sector in which an undertaking operates. the commission should review the standards every 5 years to take account of relevant developments. the commission may , when necessary , amend the standards to align them with the development of international standards.