Investors Ask EU to Fix Major Reporting Loophole: ESG Regulation

The European Union is under growing pressure to tighten its corporate ESG reporting rules, as investors balk at what they view as a new loophole for greenwashing.

The campaign follows a decision by the European Commission to snub the recommendations of sustainability experts, and instead implement the Corporate Sustainability Reporting Directive in a way that investors worry isn’t fit for purpose. The upshot is that CSRD won’t require companies to report on most ESG factors if they themselves judge the information isn’t material.

The EU Commission says its approach safeguards the competitiveness of European companies. But it risks undermining a ...