The EU Green Deal and the Sustainable Finance Framework

This white paper is the first in a set exploring the use of geospatial data in Environmental, Social and Governance (ESG) regulations. This first paper introduces the EU’s Green Deal and Sustainable Finance Framework to set the scene for exploring the European Sustainability Reporting Standards (ESRS) in detail. The ESRS are a focal point as they are the most substantial and, importantly, first mandatory sustainability standards that demand a double materiality approach. This requires a joint assessment of the impact the corporation is having on the environment and society, and the financial risks and opportunities that sustainability factors are having on the corporation. Simply put, if you adhere to the ESRS, then you are likely to satisfy other sustainability standards or frameworks.

The ESRS are a foundational element of the Corporate Sustainability Responsibility Directive (CSRD), the Sustainable Finance Reporting Directive (SFDR) and the Corporate Sustainability Due Diligence Directive (CSDDD), which together contribute to the EU’s Sustainable Finance Framework. These are mandatory directives within the EU and present the first opportunity to assess corporations on a level playing field using double materiality. The aim of this set of white papers is to present the reader with information to:

1. Understand the EU sustainability landscape, and its place within the international sustainability landscape;
2. Demonstrate the link between corporate reporting and sustainable finance, by discussing the relationship between the CSRD, SFDR and CSDDD;
3. Identify the opportunities within Financial Services due to the introduction of mandatory standards using double materiality, specifically the ESRS;
4. Demonstrate how geospatial data can be used to aid the disclosure requirements of the ESRS.