Editorial ESG News 3/2023

Dear Readers, 
The EU's response to climate change, pollution and species extinction is to make Europe the first climate-neutral continent by 2050. This ambitious goal is to be achieved with the so-called “Green Deal”. The “Green Deal” describes an ambitious agenda, i.e. a rapidly growing number of projects and measures that are not only about climate protection, but also about bringing Europe economically and geopolitically on a par with China and the USA. The aim is to make the EU fit for the future by interweaving economic, social and environmental goals.
With regard to corporate reporting, the so-called Corporate Sustainability Reporting Directive (CSRD) is the central element. The aim is to put sustainability reporting on equal terms with financial reporting. This objective makes it clear that sustainability reporting, which will be mandatory in the future, will not be a marketing gimmick or green-washing. The entire corporate reporting will change, in the truest sense of the word sustainably - in the sense of comprehensively. It is therefore not surprising that this fundamental change will be accompanied by extensive rules and regulations. Therefore, in this third issue 2023 of our ESG News, we deal with essential elements of the so-called ESG regulation. 
The framework for future mandatory sustainability reporting is provided by the European Sustainability Reporting Standards (ESRS). The legislative process for this is currently entering the final round; the adoption of the ESRS is imminent
In April of this year, new drafts and amendments to the so-called “Environmental Delegated Regulation” to the EU Taxonomy Regulation were presented. We have summarized the most important information on this for you in the article “EU Taxonomy: New Delegated Regulations Expand the Scope of Covered Sectors and Activities”. 
In the article “CSRD readiness with the help of the audit accompanying the preparation of the financial statements”, we describe how we can already support you as auditors in order to have an easier start when it comes to the mandatory reporting from 2025. We see our role as auditors not only in the function of auditor of financial and non-financial reporting, but above all in the concrete advisory support of our clients on the way there. The advantage for our clients lies in the use of our consulting expertise without us coming into a conflict of interest with the subsequent audit.

The EU plastic tax passed as part of the European Green Deal and its German implementation “Law on the Single-Use Plastic Fund” show that the topic of sustainability is also making big waves in the area of taxation.
The Supply Chain Safety Obligations Act (LkSG) has been in force in Germany since January 1, 2023. Other European countries have comparable statutory supply chain safety obligations. In the meantime, the topic has arrived in Europe. We present the negotiating positions around a European supply chain law
To combat global deforestation and forest degradation and protect the rights of indigenous peoples, the EU has issued a regulation on deforestation-free supply chains. We highlight how the regulation aims to regulate the placing on the market and supply of particularly deforestation-damaging commodities such as soy, cattle, palm oil, timber, cocoa, coffee, rubber and their products to the EU market.

The EU is not the only global player in the field of climate policy. In Brazil and China, too, policymakers are concerned with greater environmental commitment and equal opportunities. The Chinese government – as the world's largest CO2 emitter – has set ambitious goalsfor reducing CO2 emissions by 2030 and is aiming for climate neutrality by 2060. We have summarized for you how the government is helping companies to achieve this and how you can secure competitive advantages for your company in a sustainable Chinese economy in the article “How companies can benefit from ESG reporting in China”. The Brazilian government also wants to position itself as a pioneer in ESG and has already launched various programs to combat social evils. With our team, we, Rödl & Partner Brazil, are actively contributing to this process. Read more in our article “ESG aspects in Brazil”.

I hope that with this international “EU edition” of our ESG News we have once again been able to provide you with a compact guide and wish you a stimulating read. For further information or suggestions, please do not hesitate to contact us personally.

Your Martin Wambach

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