Catalyzing Sustainable Corporate Governance: A Legal Examination of the CSR Reporting

Abstract

Efforts to steer directors to the interests of the broader social community rather than simply maximising profits for shareholders are now decades away. International organisations have significantly contributed to enforcing responsible business behaviour with non-binding standards and recommendations. From a legal point of view, the EU/2014 Directive should be highlighted as the first law that introduced the obligation to disclose non-financial information in a company's business report. In the following years, economic and societal changes have shown that such reporting is essential. Still, it probably does not give the stakeholders the information they need for their (investment) decisions. As a result, at the end of 2022, the European legislator replaced the NFRD with a new corporate sustainability reporting directive (CSRD). The latter represents an essential building block of the legislative framework for sustainable financing and promoting sustainable corporate governance.