In early 2024, France introduced a provision that could send corporate directors to jail for failing to comply with the country’s new Corporate Sustainability Reporting Directive (CSRD). The penalty includes a fine of up to $81,400 and jail time of up to five years.
France has taken a stringent step to enhance compliance to Corporate Sustainability Reporting Directive (CSRD) that was give the status of law by the European Union in January 2023. CSRD is part of the European Green Deal that requires large companies to disclose regular reports of their social and environmental risks to both the government and the public.
France is the first EU member state to incorporate the directive into its national law and introduce penalties associated with a failure to comply. 2024 marks the first year of data collection, with the first reports due in 2025.
In contrast, India is still soft on compliance. But companies that trade with the EU will be forced to gear up and improve their compliance standards.
“CSRD is expected to impact over 50,000 companies, [including] a significant number of non-EU organizations,” said Kristen Sullivan, audit & assurance partner at Deloitte. Sullivan, quoted by GreenBiz magazine, estimates that companies must submit more than 80 disclosures and 1,100 data points in their official reports.
The reach of the directive is extensive, according to Sullivan, impacting companies around the world not technically connected to the EU’s CSRD laws. “Think about the value chain partners [and] entities who receive funding [or] investment capital from entities in the EU who will be subject to the disclosure,” said Sullivan, explaining the inevitable domino effect that will affect each company’s supply chain.