Update on the EU Corporate Sustainability Reporting Directive (CSRD) for Japanese Companies

Published on December 14, 2022, Corporate Sustainability Reporting Directive (EU) 2022/2464 (CSRD) imposes sustainability-related reporting obligations on entities satisfying certain criteria. “Sustainability-related” under the CSRD refers to matters related to environmental, social and human rights and governance factors, including the sustainability factors listed in Regulation (EU) 2019/2088 (i.e., environmental, social and labor rights, respect for human rights, anti‐corruption and anti‐bribery matters). The CSRD will enter into force on January 1, 2024, and certain entities will need to begin sustainability reporting as soon as 2025.

This article reviews entities to which the CSRD will apply, outlines the CSRD’s requirements and discusses how it will impact Japanese companies at both the level of their European subsidiaries and at a group level.