ESG reporting serves as a tool for companies to identify and manage risk, evaluate and measure success, and to identify future challenges and opportunities. You can read more about the ‘S’ and ‘G’ in ‘ESG’ here.
The Norwegian Act on Sustainable Finance, which implements the EU Taxonomy Regulation and the Disclosure Regulation (SFDR), came into force on 1 January 2023. The Act imposes significant reporting obligations on the companies, financial market participants and financial advisors within its scope.
The EU recently adopted a new directive on sustainability reporting, the Corporate Sustainability Reporting Directive (CSRD), which replaces a previous Non-Financial Reporting Directive (NFRD). The CSRD has been included in section 3-3 (c) of the Norwegian Accounting Act. The CSRD expands reporting requirements and enables investors, stakeholders and the public to access more reliable information concerning a company's sustainability record.
The Ministry of Finance has indicated that the Directive is EEA-relevant and that Norway will follow the EU timeline for gradual implementation for businesses of different sizes.
To ensure compliance with existing and new reporting obligations, affected businesses should:
- Identify which reporting obligations will apply in future
- Establish effective routines for collecting necessary data
- Conduct strategic assessments of ‘additional reporting’ with regard to market or financial advantages
- Develop a sound methodology for reporting