Strengthening of the quality of corporate reporting and its enforcement

ClientEarth asserts that compliance with the NFRD is extremely poor and that national competent authorities (NCAs) are failing to enforce reporting obligations. The document highlights data showing significant gaps in climate-related disclosures among large European companies and argues that without immediate enforcement action, the transition to the CSRD will be hindered by a lack of supervisory experience and lost time.

• Compliance with the Non-Financial Reporting Directive (NFRD) is critically low, with reporting often failing to provide a clear understanding of a company's sustainability performance and impact.
• Analysis of Europe's fifty largest listed companies by the Climate Disclosure Standards Board (CDSB) revealed that 30% reported immaterial information, nearly 50% omitted relevant environmental aspects of their business model, and only 8% used a double materiality perspective.
• Research by the Alliance for Corporate Transparency (ACT) on over 300 companies in Central, Eastern, and Southern Europe found that only 40% disclosed climate-related business risks, 20% provided no key performance indicators, and 46% failed to disclose policy outcomes.
• Enforcement of sustainability reporting is described as practically non-existent; ESMA reported a 5% action rate for non-financial statements in 2020, compared to a 38% action rate for financial statements.
• National competent authorities (NCAs) lack transparent procedures for stakeholder notifications and often claim a lack of competence or cite confidentiality to avoid disclosing enforcement outcomes.
• The proposed Corporate Sustainability Reporting Directive (CSRD) will significantly expand the number of companies required to report from approximately 11,000 to 49,000, increasing the pressure on NCAs that currently lack enforcement experience.
• ClientEarth argues that waiting for the CSRD to be fully implemented in 2024 and 2025 is too slow given current sustainability crises, and that NCAs must ramp up enforcement of the existing NFRD immediately.

APA

ClientEarth (2022). Strengthening of the quality of corporate reporting and its enforcement. https://www.clientearth.org/media/sbvog5lz/clientearth-response_strengthening-of-the-quality-of-corporate-reporting-and-its-enforcement_180222.pdf

Chicago

ClientEarth. Strengthening of the quality of corporate reporting and its enforcement. 2022. https://www.clientearth.org/media/sbvog5lz/clientearth-response_strengthening-of-the-quality-of-corporate-reporting-and-its-enforcement_180222.pdf.

Wikipedia

{{cite press release |author=ClientEarth |title=Strengthening of the quality of corporate reporting and its enforcement |date=February 2022 |url=https://www.clientearth.org/media/sbvog5lz/clientearth-response_strengthening-of-the-quality-of-corporate-reporting-and-its-enforcement_180222.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@misc{clientearth2022strengthening, author = {{ClientEarth}}, title = {{Strengthening of the quality of corporate reporting and its enforcement}}, publisher = {ClientEarth}, year = {2022}, month = feb, url = {https://www.clientearth.org/media/sbvog5lz/clientearth-response_strengthening-of-the-quality-of-corporate-reporting-and-its-enforcement_180222.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }