### (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 based on and developed with a broad consultation involving social partners , consumer organisations , ngos and other relevant stakeholders , who should be able to participate in the standard setting process on equal footing and without fees. 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 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 can 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 by an independent body constituted of a balanced representation of relevant stakeholders , including civil society organisations and social partners. 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.


### (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 . they should also take account of other reporting requirements in directive 2013/34/eu in particular reporting on payments to governments by undertakings active in the extractive industry and the logging of forests , as well as other reporting requirement 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 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 , in particular by supporting the process to develop standards by the international sustainability standards board.


### (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 , soil , water and biodiversity. regulation (eu) 2020/852 provides a classification of the environmental objectives of the union. for reasons of coherence , it is necessary 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 impacts on sustainability matters and the risks to the undertaking arising from sustainability matters.


### (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 workers' rights , diversity , inclusion , gender equality and human rights. such information should cover the impacts of undertakings on people , especially its workers and local communities and on human health in general. the information that undertakings disclose about human rights should include information about forced labour and child labour in their value chains. 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 , including equal opportunities for all and decent 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 and the un convention on the rights of the child and the un declaration on the rights of indigenous peoples , 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. 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 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 united nation guiding principles on business and human rights , the international labour organization’s declaration on fundamental principles and rights at work , the fundamental conventions and governance conventions of the international labour organisation , particularly on child and forced labour and freedom of association and collective bargaining , the european convention on human rights (echr) , european social charter , the oecd guidelines for multinational enterprises , and the charter of fundamental rights of the european union.


### (44) users need information about governance factors , including information on the role of an undertaking’s administrative , management and supervisory bodies , including with regard to sustainability matters , the composition of such bodies , and an undertaking’s internal control and risk management systems , including in relation to the reporting process. users also need information about undertakings’ corporate culture and approach to business ethics , including anti-corruption and anti-bribery , and about their political engagements , including lobbying activities. information about the management of the undertaking and the quality of relationships with business partners , including payment practices relating to the date or period for payment , the rate of interest for late payment or the compensation for recovery costs referred to in directive 2011/7/eu of the european parliament and of the council62 on late payment in commercial transactions , helps users to understand an undertaking’s risks as well as its impacts on sustainability matters. every year , thousands of businesses , especially smes , suffer administrative and financial burdens because they are paid late , or not at all. ultimately , late payments lead to insolvency and bankruptcy , with destructive effects on entire value chains. increasing information about payment practices should empower other undertakings to identify prompt and reliable payers , detect unfair payment practices , access information about the businesses they trade with , and negotiate fairer payment terms. ### (44) users need information about governance factors , including information on the role of an undertaking’s administrative , management and supervisory bodies , including with regard to sustainability matters , the composition of such bodies , and an undertaking’s internal control and risk management systems , including in relation to the reporting process. users also need information about undertakings’ corporate culture , notably equal opportunities , anti-discrimination and inclusive measures , prevention of work-place violence and harassment as well as the undertaking’s approach to business ethics , including anti-corruption and anti-bribery , and about their political engagements , including lobbying activities. information about the management of the undertaking and the quality of relationships with business partners , including payment practices relating to the date or period for payment , the rate of interest for late payment or the compensation for recovery costs referred to in directive 2011/7/eu of the european parliament and of the council62 on late payment in commercial transactions , helps users to understand an undertaking’s risks as well as its impacts on sustainability matters. every year , thousands of businesses , especially smes , suffer administrative and financial burdens because they are paid late , or not at all. ultimately , late payments lead to insolvency and bankruptcy , with destructive effects on entire value chains. increasing information about payment practices should empower other undertakings to identify prompt and reliable payers , detect unfair payment practices , access information about the businesses they trade with , and negotiate fairer payment terms.


### (44) users need information about governance factors , including information on the role of an undertaking’s administrative , management and supervisory bodies , including with regard to sustainability matters , the composition of such bodies , and an undertaking’s internal control and risk management systems , including in relation to the reporting process. users also need information about undertakings’ corporate culture and approach to business ethics , including anti-corruption and anti-bribery , and about their political engagements , including lobbying activities. information about the management of the undertaking and the quality of relationships with business partners , including payment practices relating to the date or period for payment , the rate of interest for late payment or the compensation for recovery costs referred to in directive 2011/7/eu of the european parliament and of the council62 on late payment in commercial transactions , helps users to understand an undertaking’s risks as well as its impacts on sustainability matters. every year , thousands of businesses , especially smes , suffer administrative and financial burdens because they are paid late , or not at all. ultimately , late payments lead to insolvency and bankruptcy , with destructive effects on entire value chains. increasing information about payment practices should empower other undertakings to identify prompt and reliable payers , detect unfair payment practices , access information about the businesses they trade with , and negotiate fairer payment terms. ### (44) users need information about governance factors , including information on the role of an undertaking’s administrative , management and supervisory bodies , including with regard to sustainability matters , the composition of such bodies , including the gender balance of company boards and related policies for increasing diversity , and an undertaking’s internal control and risk management systems , including in relation to the reporting process. users also need information about undertakings’ corporate culture and approach to business ethics , including anti-corruption and anti-bribery , and about their political engagements , including lobbying activities. information about the management of the undertaking and the quality of relationships with business partners , including payment practices relating to the date or period for payment , the rate of interest for late payment or the compensation for recovery costs referred to in directive 2011/7/eu of the european parliament and of the council62 on late payment in commercial transactions , helps users to understand an undertaking’s risks as well as its impacts on sustainability matters. every year , thousands of businesses , especially smes , suffer administrative and financial burdens because they are paid late , or not at all. ultimately , late payments lead to insolvency and bankruptcy , with destructive effects on entire value chains. increasing information about payment practices should empower other undertakings to identify prompt and reliable payers , detect unfair payment practices , access information about the businesses they trade with , and negotiate fairer payment terms.


### (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 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 , and the list of high-risk sectors based on a delegated act every two years.


### (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 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. standards for undertakings active in sectors that have severe impacts on sustainability factors should be developed as a priority. the commission should review the standards every 3 years to take account of relevant developments , including the development of international standards.


### (48) directive 2013/34/eu does not require that the financial statements or the management report are provided in a digital format , which hinders the findability and usability of the reported information. users of sustainability information increasingly expect such information to be findable and machine-readable in digital formats. digitalisation creates opportunities to exploit information more efficiently and holds the potential for significant cost savings for both users and undertakings. undertakings should therefore be required to prepare their financial statements and their management report in xhtml format in accordance with article 3 of commission delegated regulation (eu) 2019/815 ,63 and to mark-up sustainability information , including the disclosures required by article 8 of regulation (eu) 2020/852 , in accordance with that delegated regulation. a digital taxonomy to the union sustainability reporting standards will be necessary to allow for the information reported to be tagged in accordance with those standards. these requirements should feed into the work on digitalisation announced by the commission in its communication a european strategy for data64 and in the digital finance strategy for the eu.65 these requirements also complement the creation of a european single access point for public corporate information as envisaged in the capital markets union action plan , which also considers the need for structured data. ### (48) directive 2013/34/eu does not require that the financial statements or the management report are provided in a digital format , which hinders the findability and usability of the reported information. users of sustainability information increasingly expect such information to be findable and machine-readable in digital formats and fully accessible , notably for persons with disabilities following directive 2019/882. digitalisation creates opportunities to exploit information more efficiently and holds the potential for significant cost savings for both users and undertakings. undertakings should therefore be required to prepare their financial statements and their management report in xhtml format in accordance with article 3 of commission delegated regulation (eu) 2019/815 ,63 and to mark-up sustainability information , including the disclosures required by article 8 of regulation (eu) 2020/852 , in accordance with that delegated regulation. a digital taxonomy to the union sustainability reporting standards will be necessary to allow for the information reported to be tagged in accordance with those standards. these requirements should feed into the work on digitalisation announced by the commission in its communication a european strategy for data64 and in the digital finance strategy for the eu.65 these requirements also complement the creation of a european single access point for public corporate information as envisaged in the capital markets union action plan , which also considers the need for structured data.


### (48) directive 2013/34/eu does not require that the financial statements or the management report are provided in a digital format , which hinders the findability and usability of the reported information. users of sustainability information increasingly expect such information to be findable and machine-readable in digital formats. digitalisation creates opportunities to exploit information more efficiently and holds the potential for significant cost savings for both users and undertakings. undertakings should therefore be required to prepare their financial statements and their management report in xhtml format in accordance with article 3 of commission delegated regulation (eu) 2019/815 ,63 and to mark-up sustainability information , including the disclosures required by article 8 of regulation (eu) 2020/852 , in accordance with that delegated regulation. a digital taxonomy to the union sustainability reporting standards will be necessary to allow for the information reported to be tagged in accordance with those standards. these requirements should feed into the work on digitalisation announced by the commission in its communication a european strategy for data64 and in the digital finance strategy for the eu.65 these requirements also complement the creation of a european single access point for public corporate information as envisaged in the capital markets union action plan , which also considers the need for structured data. ### (48) directive 2013/34/eu does not require that the financial statements or the management report are provided in a digital format ,which hinders the findability accessibility and usability of the reported information. users of sustainability information increasingly expect such information to be findable and machine-readable in digital formats and published under open data principles. digitalisation creates opportunities to exploit information more efficiently and holds the potential for significant cost savings for both users and undertakings. undertakings should therefore be required to prepare their financial statements and make publicly available their management report in xhtml format in accordance with article 3 of commission delegated regulation (eu) 2019/815 ,63 and to mark-up sustainability information , including the disclosures required by article 8 of regulation (eu) 2020/852 , in accordance with that delegated regulation. a digital taxonomy to the union sustainability reporting standards will be necessary to allow for the information reported to be tagged in accordance with those standards. these requirements should feed into the work on digitalisation announced by the commission in its communication a european strategy for data64 and in the digital finance strategy for the eu.65 these requirements also complement the creation of a european single access point for public corporate information as envisaged in the capital markets union action plan , which also considers the need for structured data.


### (51) article 20 of directive 2013/34/eu requires undertakings with securities listed on regulated markets to include a corporate governance statement in their management report , which has to contain among other information a description of the diversity policy applied by the undertaking in relation to its administrative , management and supervisory bodies. article 20 of directive 2013/34/eu leaves flexibility to undertakings to decide what aspects of diversity they report on. it does not explicitly oblige undertakings to include information on any particular aspect of diversity. in order progress towards a more gender-balanced participation in economic decision-making , it is necessary to ensure that undertakings with securities listed on regulated markets always report on their gender diversity policies and the implementation thereof. however , to avoid unnecessary administrative burden , those undertakings should have the possibility to report some of the information required by article 20 of directive 2013/34/eu alongside other sustainability-related information. ### (51) article 20 of directive 2013/34/eu requires undertakings with securities listed on regulated markets to include a corporate governance statement in their management report , which has to contain among other information a description of the diversity policy applied by the undertaking in relation to its administrative , management and supervisory bodies. article 20 of directive 2013/34/eu leaves flexibility to undertakings to decide what aspects of diversity they report on. it does not explicitly oblige undertakings to include information on any particular aspect of diversity. in order progress towards a more gender-balanced participation in economic decision-making and gender equality in general , it is necessary to ensure that undertakings with securities listed on regulated markets always report on their gender diversity policies , especially with regards to women on boards , and the implementation thereof. however , to avoid unnecessary administrative burden , those undertakings should have the possibility to report some of the information required by article 20 of directive 2013/34/eu alongside other sustainability-related information.


### (53) the assurance profession distinguishes between limited and reasonable assurance engagements. the conclusion of a limited assurance engagement is usually provided in a negative form of expression by stating that no matter has been identified by the practitioner to conclude that the subject matter is materially misstated. the auditor performs fewer tests than in a reasonable assurance engagement. the amount of work for a limited assurance engagement is therefore less than for reasonable assurance. the work effort in a reasonable assurance engagement entails extensive procedures including consideration of internal controls of the reporting undertaking and substantive testing , and is therefore significantly higher than in a limited assurance engagement. the conclusion of this type of engagement is usually provided in a positive form of expression and states an opinion on the measurement of the subject matter against previously defined criteria. article 19a(5) and article 29a(5) of directive 2013/34/eu require member states to ensure that the statutory auditor or audit firm checks whether the non-financial statement or the separate report has been provided. it does not require that an independent provider of assurance services verifies the information , although it allows member states to require such verification where they wish to. the absence of an assurance requirement on sustainability reporting , in contrast to the requirement for the statutory auditor to perform a reasonable assurance engagement on financial statements , would threaten the credibility of the sustainability information disclosed , thus failing to meet the needs of the intended users of that information. although the objective is to have a similar level of assurance for financial and sustainability reporting , the absence of a commonly agreed standard for the assurance of sustainability reporting creates the risk of different understandings and expectations of what a reasonable assurance engagement would consist of for different categories of sustainability information , especially with regard to forward looking and qualitative disclosures. therefore , a progressive approach to enhance the level of the assurance required for sustainability information should be considered , starting with an obligation on the statutory auditor or audit firm to express an opinion about the compliance of the sustainability reporting with union requirements based on a limited assurance engagement. this opinion should cover the compliance of the sustainability reporting with union sustainability reporting standards , the process carried out by the undertaking to identify the information reported pursuant to the sustainability reporting standards and compliance with the requirement to mark-up sustainability reporting. the auditor should also assess whether the undertaking’s reporting complies with the reporting requirements of article 8 of regulation (eu) 2020/852. to guarantee a common understanding and expectations of what a reasonable assurance engagement would consist of , the statutory auditor or audit firm should be required to express an opinion based on a reasonable assurance engagement about the compliance of the sustainability reporting with union requirements , should the commission adopt assurance standards for reasonable assurance of sustainability reporting. this would also allow for the progressive development of the assurance market for sustainability information , and of undertakings’ reporting practices. finally , this progressive approach would phase in the increase in costs for reporting undertakings , given that reasonable assurance is more costly than limited assurance. ### (53) the assurance profession distinguishes between limited and reasonable assurance engagements. the conclusion of a limited assurance engagement is usually provided in a negative form of expression by stating that no matter has been identified by the practitioner to conclude that the subject matter is materially misstated. the auditor performs fewer tests than in a reasonable assurance engagement. the amount of work for a limited assurance engagement is therefore less than for reasonable assurance. the work effort in a reasonable assurance engagement entails extensive procedures including consideration of internal controls of the reporting undertaking and substantive testing , and is therefore significantly higher than in a limited assurance engagement. the conclusion of this type of engagement is usually provided in a positive form of expression and states an opinion on the measurement of the subject matter against previously defined criteria. article 19a(5) and article 29a(5) of directive 2013/34/eu require member states to ensure that the statutory auditor or audit firm checks whether the non-financial statement or the separate report has been provided. it does not require that an independent provider of assurance services verifies the information , although it allows member states to require such verification where they wish to. the absence of an assurance requirement on sustainability reporting , in contrast to the requirement for the statutory auditor to perform a reasonable assurance engagement on financial statements , would threaten the credibility of the sustainability information disclosed , thus failing to meet the needs of the intended users of that information. although the objective is to have a similar level of assurance for financial and sustainability reporting , the absence of a commonly agreed standard for the assurance of sustainability reporting creates the risk of different understandings and expectations of what a reasonable assurance engagement would consist of for different categories of sustainability information , especially with regard to forward looking and qualitative disclosures. therefore , the level of the assurance required for sustainability information , including on workers’ rights and working conditions should be enhanced to the level of reasonable assurance. to guarantee a common understanding and expectations of what a reasonable assurance engagement would consist of , the statutory auditor or audit firm should be required to express an opinion based on a reasonable assurance engagement about the compliance of the sustainability reporting with union requirements , should the commission adopt assurance standards for reasonable assurance of sustainability reporting.


### (69) according to article 51 of directive 2013/34/eu , the enforcement of corporate reporting by undertakings the securities of which are not listed on regulated markets is carried out by member states. the types of sanctions are , however , not specified , which means that sanctioning regimes can vary widely between member states , so undermining the single market. to improve sustainability reporting in the internal market and to contribute to the transition towards a fully sustainable and inclusive economic and financial system in which the benefits of growth are broadly shared in accordance with the european green deal , member states should provide for certain sanctions and administrative measures in the case of infringements of sustainability reporting requirements. the sanctioning regime of directive 2013/34/eu should therefore be strengthened accordingly , whereby member states are to provide for appropriate sanctions and administrative measures. ### (69) according to article 51 of directive 2013/34/eu , the enforcement of corporate reporting by undertakings the securities of which are not listed on regulated markets is carried out by member states. the types of sanctions are , however , not specified , which means that sanctioning regimes can vary widely between member states , so undermining the single market. to improve sustainability reporting in the internal market and to contribute to the transition towards a fully sustainable and inclusive economic and financial system in which the benefits of growth are broadly shared in accordance with the european green deal and its just transition , member states should provide for certain sanctions and administrative measures in the case of infringements of sustainability reporting requirements. the sanctioning regime of directive 2013/34/eu should therefore be strengthened accordingly , whereby member states are to provide for appropriate sanctions and administrative measures.


### (71) member states are invited to assess the impact of their transposition act on smes in order to ensure that they are not disproportionately affected , giving specific attention to micro-enterprises and to the administrative burden , and to publish the results of such assessments. member states should consider introducing measures to support smes in applying the voluntary simplified reporting standards. ### (71) member states are invited to assess the impact of their transposition act on smes in order to ensure that they are not disproportionately affected , giving specific attention to micro-enterprises and to publish the results of such assessments. member states should introduce measures to support smes in applying the reporting standards.


### (71) member states are invited to assess the impact of their transposition act on smes in order to ensure that they are not disproportionately affected , giving specific attention to micro-enterprises and to the administrative burden , and to publish the results of such assessments. member states should consider introducing measures to support smes in applying the voluntary simplified reporting standards. ### (71) member states are invited to assess the impact of their transposition act on smes in order to ensure that they are not disproportionately affected , giving specific attention to micro-enterprises and to the unnecessary administrative burden , and to publish the results of such assessments. member states should consider introducing measures to support smes in applying the voluntary simplified reporting standards.


### (17) ‘sustainability matters’ means sustainability factors as defined in article 2 , point (24) of regulation (eu) 2019/2088 of the european parliament and of the council\*4 , and governance factors; ### (17) ‘sustainability matters’ means sustainability factors as defined in article 2 , point (24) of regulation (eu) 2019/2088 of the european parliament and of the council\*4 , including the underlying methodologies and indicators pertaining to environmental matters set out in that regulation , as well as the delegated acts pursuant to it , and governance factors;


### (17) ‘sustainability matters’ means sustainability factors as defined in article 2 , point (24) of regulation (eu) 2019/2088 of the european parliament and of the council\*4 , and governance factors; ### (17) ‘sustainability matters’ refers to environmental , social and employee matters , respect for human rights , anti-corruption and anti-bribery matters (sustainability factors) , as well as proportionate and commensurate due diligence by undertakings to identify , prevent , mitigate , remediate , and communicate on adverse impacts on human rights , labour rights , including trade unions rights , the environment and good governance in relation to their own activities , their value chains and business relationships , with reference to applicable legal duties , standards and guidance;


### 1. large undertakings and , as of 1 january 2026 , small and medium-sized undertakings which are undertakings referred to in article 2 , point (1) , point (a) , shall include in the management report information necessary to understand the undertaking’s impacts on sustainability matters , and information necessary to understand how sustainability matters affect the undertaking’s development , performance and position. ### 1. all undertakings , including undertakings referred to in article 2 , point (1) , point (a) , small and medium-sized undertakings , undertakings registered as foundations , partnerships or similar structure fulfilling the criteria for undertakings and undertakings with their seat in a non-eu country having significant business in the eu4a shall include in the management report information necessary to understand the undertaking’s impacts on sustainability matters , and information necessary to understand how sustainability matters affect the undertaking’s development , supply and value chain , performance and position.


### (iii) the plans of the undertaking to ensure that its business model and strategy are compatible with the transition to a sustainable economy and with the limiting of global warming to 1.5 °c in line with the paris agreement; ### (iii) the plans of the undertaking to ensure that its business model and strategy are compatible with the just transition to a sustainable economy and with the limiting of global warming to 1.5 °c in line with the paris agreement;


### (iv) how the undertaking’s business model and strategy take account of the interests of the undertaking’s stakeholders and of the impacts of the undertaking on sustainability matters; ### (iv) how the undertaking’s business model and strategy ensure decent work , fair wages , company training and further education of workers , information and consultation of workers and safeguard the rights of trade unions and take account of the interests of the undertaking’s stakeholders and of the impacts of the undertaking on sustainability matters along the entire supply and value chain;


### the due diligence process implemented with regard to sustainability matters; ### the due diligence process implemented with regard to sustainability matters , notably regarding human rights and environmental due diligence along the entire supply and value chain , including gender equality and workers’ rights as well as plans to eradicate child labour and forced labour;


### where appropriate , the information referred to in paragraphs 1 and 2 shall contain information about the undertaking’s value chain , including the undertaking’s own operations , products and services , its business relationships and its supply chain. ### the information referred to in paragraphs 1 and 2 shall contain information about the undertaking’s value chain , including the undertaking’s own operations , products and services , its business relationships and its supply chain.


### member states may allow information relating to impending developments or matters in the course of negotiation to be omitted in exceptional cases where , in the duly justified opinion of the members of the administrative , management and supervisory bodies , acting within the competences assigned to them by national law and having collective responsibility for that opinion , the disclosure of such information would be seriously prejudicial to the commercial position of the undertaking , provided that such omission does not prevent a fair and balanced under standing of the undertaking's development , performance , position and impact of its activity. ### deleted


### 4. undertakings shall report the information referred to in paragraphs 1 to 3 in accordance with the sustainability reporting standards referred to in article 19b. ### 4. undertakings shall report the information referred to in paragraphs 1 to 3 in accordance with the sustainability reporting standards referred to in article 19b and annex the separate reports of any subsidiary undertaking broken down by country.


### [...] ### deleted


### the consolidated management report of the parent undertaking referred to in subparagraph 1 shall be published in accordance with article 30 , in the manner prescribed by the law of the member state by which the undertaking that is exempted from the obligations set out in paragraphs 1 to 4 is governed. ### deleted


### the member state by which the undertaking that is exempted from the obligations set out in paragraphs 1 to 4 is governed , may require that the consolidated management report referred to in the first subparagraph of this paragraph is published in an official language of the member state or in a language customary in the sphere of international finance , and that any necessary translation into those languages is certified. ### deleted


### the management report of an undertaking that is exempted from the obligations set out in paragraphs 1 to 4 shall contain all of the following information: ### deleted


### 1. large undertakings and , as of 1 january 2026 , small and medium-sized undertakings which are undertakings referred to in article 2 , point (1) , point (a) , shall include in the management report information necessary to understand the undertaking’s impacts on sustainability matters , and information necessary to understand how sustainability matters affect the undertaking’s development , performance and position. ### 1. large undertakings , small and medium-sized undertakings which are undertakings referred to in article 2 , point (1) , point (a) , and small and medium-sized undertakings operating in high-risk sectors , shall include in the management report information necessary to understand the undertaking’s impacts on sustainability matters , and information necessary to understand how sustainability matters affect the undertaking’s development , performance and position.


### (iii) the plans of the undertaking to ensure that its business model and strategy are compatible with the transition to a sustainable economy and with the limiting of global warming to 1.5 °c in line with the paris agreement; ### (iii) the plans of the undertaking including a transition pathway , comprising of short-term and medium-term absolute emission reduction targets for 2025 and 2030 , reviewed every five years up to 2050 , to achieve carbon neutrality by 2050 at the latest , and implementing actions and related financial and investment plans , to ensure that its business model and strategy are compatible with the transition to a sustainable economy and with the limiting of global warming to 1.5 °c in line with the paris agreement with no or limited overshoot and recourse to compensation technologies , and pursuant to the latest recommendations of the ipcc and the european scientific advisory board on climate change; and the degree of exposure of the undertaking to sectors listed in divisions 05 , 06 ,09 , 19 , 35 , 46.71 , 73.1 of annex i to regulation (ec) no 1893/2006 insofar as they relate to coal , oil , gas-related activities;


### how the undertaking’s strategy has been implemented with regard to sustainability matters; ### how sustainability matters and related science-based targets , in connection with risks , opportunities , and severe impacts , have been integrated into the undertaking’s strategy , and how the undertaking’s strategy has been implemented with regard to sustainability matters;


### a description of the targets related to sustainability matters set by the undertaking and of the progress the undertaking has made towards achieving those targets; ### a description of the time-bound short-term , mid-term and long-term targets set by the undertaking with respect to the undertaking's risks , opportunities , severe impacts and timely alignment with relevant public goals , whether such targets are science-based alongside corresponding evidence , implementing actions and related financial and investment plans and of the progress the undertaking has made towards achieving those targets;


### a description of the role of the administrative , management and supervisory bodies with regard to sustainability matters; ### a description of the role of the administrative , management and supervisory bodies with regard to sustainability matters; including with regard to:


### a description of the undertaking’s policies in relation to sustainability matters; ### a description of the undertaking’s policies in relation to sustainability matters including at minimum with respect to identified severe impacts , risks , and opportunities;


### the due diligence process implemented with regard to sustainability matters; ### the due diligence process implemented with regard to sustainability matters in line with applicable eu legislation on due diligence [directive xxx] and the un guiding principles for business and human rights and the oecd due diligence guidance for responsible business conduct , including information on:


### (ii) the principal actual or potential adverse impacts connected with the undertaking’s value chain , including its own operations , its products and services , its business relationships and its supply chain; ### (ii) the actual or potential severe impacts connected with the undertaking’s value chain as identified through the due diligence process , including its own operations , its products and services , its business relationships , its subsidiaries , and its supply chain , including information on people affected by those impacts and the effect of the undertaking’s business policies , practices and decisions on the identified issues , including of the undertaking’s purchasing policies and practices;


### (iii) any actions taken , and the result of such actions , to prevent , mitigate or remediate actual or potential adverse impacts; ### (iii) any actions taken , and the result of such actions , to prevent , mitigate or remediate actual or potential severe impacts and the effectiveness of their results;


### indicators relevant to the disclosures referred to in points (a) to (f). ### indicators relevant to the disclosures referred to in points (a) to (f) , including key performance indicators set out in the delegated act supplementing article 8 of the regulation (eu) 2020/852.


### undertakings shall report the process carried out to identify the information that they have included in the management report in accordance with paragraph 1 and in this process they shall take account of short , medium and long-term horizons. ### undertakings shall report the process carried out to identify the information that they have included in the management report in accordance with paragraph 1 , including how it is informed by the due diligence process , and in this process they shall take account of short , medium and long-term horizons.


### where appropriate , the information referred to in paragraphs 1 and 2 shall contain information about the undertaking’s value chain , including the undertaking’s own operations , products and services , its business relationships and its supply chain. ### where necessary for the understanding of the undertaking's impacts or risks , the information referred to in paragraphs 1 and 2 shall contain information about the undertaking’s value chain , including the undertaking’s own operations , assets , products and services , its business relationships and its supply chain , involved in such risks and impacts.


### an undertaking which is a subsidiary undertaking shall be exempted from the obligations set out in paragraphs 1 to 4 if that undertaking and its subsidiary undertakings are included in the consolidated management report of a parent undertaking , drawn up in accordance with articles 29 and 29a. an undertaking that is a subsidiary undertaking from a parent undertaking that is established in a third country shall also be exempted from the obligations set out in paragraphs 1 to 4 where that undertaking and its subsidiary undertakings are included in the consolidated management report of that parent undertaking and where the consolidated management report is drawn up in a manner that may be considered equivalent , in accordance with the relevant implementing measures adopted pursuant to article 23(4) , point (i) , of directive 2004/109/ec of the european parliament and of the council*6 , to the manner required by the sustainability reporting standards referred to in article 19b of this directive. ### an undertaking which is a subsidiary undertaking shall be exempted from the obligations set out in paragraphs 1 and 2 , with exception of obligations set out in paragraph 1 (b) , (e) and (f) , and corresponding obligations set out in (g) , if that undertaking and its subsidiary undertakings are included in the consolidated management report of a parent undertaking , drawn up in accordance with articles 29 and 29a. an undertaking that is a subsidiary undertaking from a parent undertaking that is established in a third country shall also be exempted from the obligations set out in paragraphs 1 and 2 , with the exception of obligations set out in paragraph 1 (b) , (e) and (f) , and the corresponding obligations set out in (g) , where that undertaking and its subsidiary undertakings are included in the consolidated management report of that parent undertaking and where the consolidated management report is drawn up in a manner that may be considered equivalent , in accordance with the relevant implementing measures adopted pursuant to article 23(4) , point (i) , of directive 2004/109/ec of the european parliament and of the council*6 , to the manner required by the sustainability reporting standards referred to in article 19b of this directive.


### the consolidated management report of the parent undertaking referred to in subparagraph 1 shall be published in accordance with article 30 , in the manner prescribed by the law of the member state by which the undertaking that is exempted from the obligations set out in paragraphs 1 to 4 is governed. ### the consolidated management report of the parent undertaking referred to in subparagraph 1 shall be published in accordance with article 30 , in the manner prescribed by the law of the member state by which the undertaking that is exempted from the obligations set out in paragraphs 1 and 2 , with the exception of obligations set out in paragraph 1 (b) , (e) and (f) , and the corresponding obligations set out in (g) , is governed.


### the member state by which the undertaking that is exempted from the obligations set out in paragraphs 1 to 4 is governed , may require that the consolidated management report referred to in the first subparagraph of this paragraph is published in an official language of the member state or in a language customary in the sphere of international finance , and that any necessary translation into those languages is certified. ### the member state by which the undertaking that is exempted from the obligations set out in paragraphs 1 and 2 , with the exception of obligations set out in paragraph 1 (b) , (e) and (f) , and the corresponding obligations set out in (g) , is governed , may require that the consolidated management report referred to in the first subparagraph of this paragraph is published in an official language of the member state or in a language customary in the sphere of international finance , and that any necessary translation into those languages is certified.


### the management report of an undertaking that is exempted from the obligations set out in paragraphs 1 to 4 shall contain all of the following information: ### the management report of an undertaking that is exempted from the obligations set out in paragraphs 1 and 2 , with the exception of obligations set out in paragraph 1 (b) , (e) and (f) , and the corresponding obligations set out in (g) , shall contain all of the following information:


### the fact that the undertaking is exempted from the obligations set out in paragraphs 1 to 4 of this article. ### the fact that the undertaking is exempted from the obligations set out in paragraphs 1 and 2 , with exception of obligations set out in paragraph 1 (b) , (e) and (f) , and corresponding obligations set out in (g) , of this article.


### 1. large undertakings and , as of 1 january 2026 , small and medium-sized undertakings which are undertakings referred to in article 2 , point (1) , point (a) , shall include in the management report information necessary to understand the undertaking’s impacts on sustainability matters , and information necessary to understand how sustainability matters affect the undertaking’s development , performance and position. ### 1. large undertakings and , small and medium-sized undertakings which are undertakings referred to in article 2 , point (1) , point (a) , and small and medium-sized undertakings operating in high-risk sectors , shall include in the management report information necessary to understand the undertaking’s impacts on sustainability matters , and information necessary to understand how sustainability matters affect the undertaking’s development , performance and position.


### how the undertaking’s strategy has been implemented with regard to sustainability matters; ### how the undertaking’s strategy has been implemented with regard to sustainability matters and associated targets;


### a description of the targets related to sustainability matters set by the undertaking and of the progress the undertaking has made towards achieving those targets; ### a description of the time-bound targets and progress previously made and envisaged to be made towards achieving those targets , and corresponding evidence related to sustainability matters set by the undertaking , any potential or actual adverse impacts , and of the progress the undertaking has made towards achieving those targets;


### a description of the role of the administrative , management and supervisory bodies with regard to sustainability matters; ### a description of the role of the administrative , management and supervisory bodies with regard to sustainability matters , as well as their composition and expertise , the stakeholders they consult with on sustainability matters , their decision-making processes , and whether incentives linked to sustainability matters are offered to members of these bodies;


### a description of the undertaking’s policies in relation to sustainability matters; ### a description of the undertaking’s policies in relation to sustainability matters , including in relation to potential and actual adverse impacts;


### the due diligence process implemented with regard to sustainability matters; ### the due diligence process and strategy , pursuant to applicable eu and national legislation , and the un guiding principles for business and human rights and the oecd due diligence guidance for responsible business conduct , implemented with regard to sustainability matters;


### (ii) the principal actual or potential adverse impacts connected with the undertaking’s value chain , including its own operations , its products and services , its business relationships and its supply chain; ### (ii) the mapping process of actual or potential adverse impacts connected with the undertaking’s value chain , including its own operations , its products and services , its business relationships , its subsidiaries and its supply chain , including the persons adversely impacted , and how these have been identified and prioritised;


### (iii) any actions taken , and the result of such actions , to prevent , mitigate or remediate actual or potential adverse impacts; ### (iii) all actions taken , and the result of such actions , to prevent , mitigate , cease , or remediate actual or potential adverse impacts , and the evaluation of the effectiveness of actions taken , as well as alert mechanisms established;


### where appropriate , the information referred to in paragraphs 1 and 2 shall contain information about the undertaking’s value chain , including the undertaking’s own operations , products and services , its business relationships and its supply chain. ### the information referred to in paragraphs 1 and 2 shall contain information about the undertaking’s value chain , including the undertaking’s own operations , assets , products and services , its business relationships and its supply chain.


### [...] ### deleted


### the consolidated management report of the parent undertaking referred to in subparagraph 1 shall be published in accordance with article 30 , in the manner prescribed by the law of the member state by which the undertaking that is exempted from the obligations set out in paragraphs 1 to 4 is governed. ### the consolidated management report of a parent undertaking shall be published in accordance with article 30 , in the manner prescribed by the law of the member state by which the undertaking which meets the requirements referred to in paragraphs 1 to 4 is governed.


### the member state by which the undertaking that is exempted from the obligations set out in paragraphs 1 to 4 is governed , may require that the consolidated management report referred to in the first subparagraph of this paragraph is published in an official language of the member state or in a language customary in the sphere of international finance , and that any necessary translation into those languages is certified. ### the member state by which the undertaking which meets the requirements referred to in paragraphs 1 to 4 is governed , may require that consolidated management reports are published in an official language of the member state or in a language customary in the sphere of international finance , and that any necessary translation into those languages is certified.


### the management report of an undertaking that is exempted from the obligations set out in paragraphs 1 to 4 shall contain all of the following information: ### the management report of an undertaking which meets the requirements referred to in paragraphs 1 to 4 shall contain all of the following information:


### the name and registered office of the parent undertaking that reports information at group level in accordance with articles 29 and 29a , or in a manner that may be considered equivalent , in accordance with the implementing measures adopted pursuant to article 23(4) , point (i) of directive 2004/109/ec , to the manner required by the sustainability reporting standards referred to in article 19b; ### the name and registered office of the parent undertaking that reports information at group level for each entity which shall also be named , in accordance with articles 29 and 29a;


### the fact that the undertaking is exempted from the obligations set out in paragraphs 1 to 4 of this article. ### deleted


### 1. large undertakings and , as of 1 january 2026 , small and medium-sized undertakings which are undertakings referred to in article 2 , point (1) , point (a) , shall include in the management report information necessary to understand the undertaking’s impacts on sustainability matters , and information necessary to understand how sustainability matters affect the undertaking’s development , performance and position. ### 1. large undertakings governed by the law of a member state or established in the territory of the union , including non-eu companies with substantial business in the eu , and , as of 1 january 2026 , all publicly listed small and medium-sized undertakings , as well as high-risk non-listed small and medium-sized undertakings , shall include in the management report information necessary to understand the undertaking’s impacts on sustainability factors , due diligence , and information necessary to understand how sustainability matters , as defined in art 19a (17) , affect the undertaking’s development , performance and position.


### the due diligence process implemented with regard to sustainability matters; ### the due diligence process implemented with regard to sustainability matters in line with , the eu directive on sustainable corporate governance , national legislation , and the un guiding principles for business and human rights and the oecd due diligence guidance for responsible business conduct;


### (ii) the principal actual or potential adverse impacts connected with the undertaking’s value chain , including its own operations , its products and services , its business relationships and its supply chain; ### (ii) the actual or potential adverse impacts connected with the undertaking’s value chain , including its own operations , its products and services , its business relationships and its supply chain;


### (iii) any actions taken , and the result of such actions , to prevent , mitigate or remediate actual or potential adverse impacts; ### (iii) all actions taken , and the result of such actions , to prevent , mitigate or remediate actual or potential adverse impacts and the effectiveness of their results;


### 7. an undertaking which is a subsidiary undertaking shall be exempted from the obligations set out in paragraphs 1 to 4 if that undertaking and its subsidiary undertakings are included in the consolidated management report of a parent undertaking , drawn up in accordance with articles 29 and 29a. an undertaking that is a subsidiary undertaking from a parent undertaking that is established in a third country shall also be exempted from the obligations set out in paragraphs 1 to 4 where that undertaking and its subsidiary undertakings are included in the consolidated management report of that parent undertaking and where the consolidated management report is drawn up in a manner that may be considered equivalent , in accordance with the relevant implementing measures adopted pursuant to article 23(4) , point (i) , of directive 2004/109/ec of the european parliament and of the council*6 , to the manner required by the sustainability reporting standards referred to in article 19b of this directive. ### 7. an undertaking which is a subsidiary undertaking shall be exempted from the obligations set out in paragraphs 1 to 4 if that undertaking and its subsidiary undertakings are included in the consolidated management report of a parent are included in the consolidated management report of apparent undertaking , if this report is drawn up in accordance with articles 29 and 29a and if information required by article 19b is reported on country-by-country basis. an undertaking that is a subsidiary undertaking from a parent undertaking that is established in a third country shall also be exempted from the obligations set out in paragraphs 1 to 4 where that undertaking and its subsidiary undertakings are included in the consolidated management report of that parent undertaking and where the consolidated management report is drawn up in a manner that may be considered equivalent , in accordance with the relevant implementing measures adopted pursuant to article 23(4) , point (i) , of directive 2004/109/ec of the european parliament and of the council*6 , to the manner required by the sustainability reporting standards referred to in article 19b of this directive.


### 2. the sustainability reporting standards referred to in paragraph 1 shall require that the information to be reported is understandable , relevant , representative , verifiable , comparable , and is represented in a faithful manner. ### 2. the sustainability reporting standards referred to in paragraph 1 shall require that the information to be reported is understandable , accessible , relevant , representative , verifiable , comparable , and is represented in a faithful manner.


### equal opportunities for all , including gender equality and equal pay for equal work , training and skills development , and employment and inclusion of people with disabilities; ### equal opportunities for all , including gender equality and equal pay for equal work or work of equal value as well as pay transparency , training and skills development broken down by hours , gender and category of workers , and employment and inclusion of people with disabilities;


### (ii) working conditions , including secure and adaptable employment , wages , social dialogue , collective bargaining and the involvement of workers , work-life balance , and a healthy , safe and well-adapted work environment; ### (ii) working conditions , including secure employment , decent wages , social dialogue , collective bargaining , freedom of association and the consultation , information and involvement of workers , work-life balance , maternity , paternity and parental leave , workers’ fluctuation broken down by age , gender , region , and a healthy , safe and well-adapted work environment;


### (ii) working conditions , including secure and adaptable employment , wages , social dialogue , collective bargaining and the involvement of workers , work-life balance , and a healthy , safe and well-adapted work environment; ### (ii) working conditions , including secure and adaptable employment , wages , social dialogue , collective bargaining and the involvement of workers , work-life balance , and a healthy , safe and well-adapted work environment , including social counselling;


### (iii) respect for 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 and the ilo fundamental conventions and the charter of fundamental rights of the european union. ### (iii) due diligence processes for ensuring human rights , fundamental freedoms , democratic principles and standards established in the international bill of human rights and other core un human rights conventions , the un guiding principles on business and human rights , the international labour organization’s declaration on fundamental principles and rights at work and the ilo fundamental conventions and the charter of fundamental rights of the european union.


### the role of the undertaking’s administrative , management and supervisory bodies , including with regard to sustainability matters , and their composition; ### the role of the undertaking’s administrative , management and supervisory bodies , including with regard to sustainability matters , and their composition as regards especially diversity and the inclusion of workers;


### (ii) business ethics and corporate culture , including anti-corruption and anti-bribery; ### (ii) business ethics and corporate culture , including anti-corruption , anti-workplace violence , anti-harassment and anti-bribery;


### 1. undertakings subject to article 19a shall prepare their financial statements and their management report in a single electronic reporting format in accordance with article 3 of commission delegated regulation (eu) 2019/815*15 and shall mark-up their sustainability reporting , including the disclosures laid down in article 8 of regulation (eu) 2020/852 , in accordance with that delegated regulation. ### 1. undertakings subject to article 19a shall prepare their financial statements and their management report in a single electronic reporting format in accordance with article 3 of commission delegated regulation (eu) 2019/815*15 , directive 2019/882 and shall mark-up their sustainability reporting , including the disclosures laid down in article 8 of regulation (eu) 2020/852 , in accordance with that delegated regulation.


### 2. undertakings subject to article 29a shall prepare their consolidated financial statements and their consolidated management report in a single electronic reporting format in accordance with article 3 of delegated regulation (eu) 2019/815 and shall mark-up sustainability reporting , including the disclosures laid down in article 8 of regulation (eu) 2020/852. ### 2. undertakings subject to article 29a shall prepare their consolidated financial statements and their consolidated management report in a single electronic reporting format in accordance with article 3 of delegated regulation (eu) 2019/815 , directive 2019/882 and shall mark-up sustainability reporting , including the disclosures laid down in article 8 of regulation (eu) 2020/852.


### (ii) information that undertakings shall report that is specific to the sector in which they operate. ### (ii) information that undertakings shall report that is specific to the sector in which they operate , prioritizing the high-risk sectors;


### climate change mitigation; ### climate change mitigation , including


### (iii) water and marine resources; ### (iii) the sustainable use and protection of water and marine resources;


### (iv) resource use and circular economy; ### (iv) the transition to a circular economy , including resource use;


### pollution; ### pollution prevention and control;


### (vi) biodiversity and ecosystems; ### (vi) protection and restoration of biodiversity and ecosystems;


### (ii) information that undertakings shall report that is specific to the sector in which they operate. ### (ii) information that undertakings shall report that is specific to the sector in which they operate , with particular attention paid to high-risk business sectors.


### 2. the sustainability reporting standards referred to in paragraph 1 shall require that the information to be reported is understandable , relevant , representative , verifiable , comparable , and is represented in a faithful manner. ### 2. the sustainability reporting standards referred to in paragraph 1 will ensure the quality and relevance of reported information , by requiring that the information to be reported is understandable , relevant , representative , verifiable , reliable , comparable , and is represented in a faithful manner. when possible and relevant this information should be measurable and science-based , and it shall be understandable in the absence of contextual information.


### climate change mitigation; ### climate change mitigation , including greenhouse gas emissions and related targets for their reduction;


### (iv) resource use and circular economy; ### (iv) resource use and transition to a circular economy;


### (vi) biodiversity and ecosystems; ### (vi) the protection and restoration of biodiversity and ecosystems;


### (iii) respect for 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 and the ilo fundamental conventions and the charter of fundamental rights of the european union. ### (iii) respect for 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 and the ilo fundamental and governance conventions , the european convention on human rights , the european social charter , the oecd guidelines for multinational enterprises , the charter of fundamental rights of the european union , and eu legislation on labour and the rule of law.


### the role of the undertaking’s administrative , management and supervisory bodies , including with regard to sustainability matters , and their composition; ### the role and expertise of the undertaking’s administrative , management and supervisory bodies , including with regard to sustainability matters and the due diligence process and strategy , and their composition , including the presence of trade union and workers representatives;


### (ii) business ethics and corporate culture , including anti-corruption and anti-bribery; ### (ii) business ethics and corporate culture , including anti-corruption and anti-bribery , and whistleblowing systems;


### (iii) political engagements of the undertaking , including its lobbying activities; ### (iii) political engagements of the undertaking , including its lobbying activities and costs , political donations , and potential conflicts of interest;


### the undertaking’s internal control and risk management systems , including in relation to the undertaking’s reporting process. ### the undertaking’s internal control and risk management systems , including in relation to the undertaking’s reporting and decision-making process.


### the work of global standard-setting initiatives for sustainability reporting , and existing standards and frameworks for natural capital accounting , responsible business conduct , corporate social responsibility , and sustainable development; ### the work of global standard-setting initiatives for sustainability reporting , and existing standards and frameworks for natural capital accounting , responsible business conduct , corporate social responsibility including fair tax policies , and sustainable development;


### (ii) working conditions , including secure and adaptable employment , wages , social dialogue , collective bargaining and the involvement of workers , work-life balance , and a healthy , safe and well-adapted work environment; ### (ii) working conditions , including secure and adaptable employment , wages , social dialogue , collective bargaining and the involvement of workers , respect for trade union rights , respect for the right of workers to be informed and consulted in accordance with international european and national labour law , where applicable respect for the right of workers to elect worker board level representatives , ,work-life balance , and a healthy , safe and well-adapted work environment;


### (iii) respect for 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 and the ilo fundamental conventions and the charter of fundamental rights of the european union. ### (iii) respect for 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 and the ilo fundamental and governance conventions , the european convention of human rights , the european social charter , the oecd guidelines for multinational enterprises and the charter of fundamental rights of the european union , and the eu labour law acquis.


### (ii) business ethics and corporate culture , including anti-corruption and anti-bribery; ### (ii) business ethics and corporate culture , including anti-corruption and anti-bribery programmes , assessment of corruption risks , and whistleblowing systems and results;


### 1. undertakings subject to article 19a shall prepare their financial statements and their management report in a single electronic reporting format in accordance with article 3 of commission delegated regulation (eu) 2019/815*15 and shall mark-up their sustainability reporting , including the disclosures laid down in article 8 of regulation (eu) 2020/852 , in accordance with that delegated regulation. ### 1. undertakings subject to article 19a shall prepare their financial statements and their management report in a open data and machine-readable single electronic reporting format in accordance with article 3 of commission delegated regulation (eu)2019/815*15 and shall mark-up their sustainability reporting , including the disclosures laid down in article 8 of regulation (eu) 2020/852 , in accordance with that delegated regulation.


### a description of the diversity policy applied in relation to the undertaking's administrative , management and supervisory bodies with regard to gender and other aspects such as , age , or educational and professional backgrounds , the objectives of that diversity policy , how it has been implemented and the results in the reporting period. if no such policy is applied , the statement shall contain an explanation as to why this is the case.; ### a description of the diversity and inclusion policy applied in relation to the undertaking's administrative , management and supervisory bodies with regard to gender equality , antidiscrimination , support for minority and vulnerable groups , including persons with disabilities , and other aspects such as , age , or educational and professional backgrounds , the objectives of that diversity policy , how it has been implemented and the results in the reporting period. if no such policy is applied , the statement shall contain an explanation as to why this is the case.;


### a description of the diversity policy applied in relation to the undertaking's administrative , management and supervisory bodies with regard to gender and other aspects such as , age , or educational and professional backgrounds , the objectives of that diversity policy , how it has been implemented and the results in the reporting period. if no such policy is applied , the statement shall contain an explanation as to why this is the case.; ### a description of the diversity policy applied in relation to the undertaking's administrative , management and supervisory bodies with regard to gender and other aspects such as , age , or educational and professional backgrounds , the objectives of that diversity policy , how it has been implemented and the results in the reporting period;