CSRD and SFDR: our requests to the European Commission
Europe
Climate neutrality by 2050 is one of the key objectives of the Green Deal for Europe. A series of European texts - that already entered into force or are about to be adopted by the EU - will commit start-ups and VCs to a sustainable trajectory. In concrete terms, what are we talking about, and how can we anticipate these regulations? Find more about France Digitale's positions.
Startups, investors and the ESG trajectory: our requests to the European Commission
Climate neutrality by 2050 is one of the key objectives of the Green Deal for Europe. A series of European texts – that already entered into force or are about to be adopted by the EU – will commit start-ups and VCs to a sustainable trajectory. In concrete terms, what are we talking about, and how can we anticipate these regulations?
CSRD, SFDR… what are we talking about?
As far as start-ups are concerned, the CSRD (Corporate Sustainability Reporting Directive), which comes into force on 1 January 2024, will impose obligations on companies to (i) collect data on their sustainability performance, and (ii) implement action plans and trajectories to commit to a social and environmental transition that is more necessary than ever. Although start-ups are not directly affected by the CSRD (which imposes extra-financial reporting rules on ‘large’ companies), they will have to adopt this reporting in order to continue contracting with large companies (which are themselves subject to the text). In the future, calls for tender from major groups will no longer be based solely on price, but will also include criteria such as carbon tonnage, diversity and inclusion.
On the VC side, the SFDR (Sustainable Finance Disclosure Regulation) and Taxonomy encourage investors to better finance the transition of our economy. In practice, VCs are subject to non-financial reporting obligations for themselves and their portfolios. This has a direct impact on start-ups, which complete multiple reporting questionnaires… and must commit to improve their sustainable trajectory in order to continue raising funds.
How can start-ups and VCs be supported to commit to a sustainability trajectory?
European regulations have a tendency to be shaped with large groups in mind… and not start-ups and VCs.
France Digitale has called on the European Commission to roll out the Green Deal while enabling start-ups and VCs to commit to a common sustainability path.
Our two key requests to the European Commission:
1 – Take startups into account when drawing up the regulatory framework and rolling it out.
2 – Develop a more robust and harmonised final reporting framework: we call for consistency to be maintained between the various texts (CSRD, SFDR in particular) to simplify and support the commitment of SMEs and startups to sustainability.
Find all our detailed proposals: