From: RTE (online) Lack of understanding of new EU anti-greenwashing rules, research shows
Almost half of Irish companies are concerned about the costs or time involved in meeting new EU rules on greenwashing, new research shows.
The Corporate Sustainability Reporting Directive (CSRD), strengthens the rules around the social and environmental information which companies have to report.
Under the law, EU companies will have to report in more detail, and therefore be more transparent about the impact of their actions and policies on the environment, human rights and social standards.
The rules also aim to tackle so-called 'greenwashing', when businesses mislead consumers to make them believe their products or services are sustainable, when that's not the case.
More large companies, as well as listed SMEs, will be required to report on sustainability as a result of the new law.
Last January, the Irish Government, along with other EU member states were given 18 months to bring the EU directive into law.
But new research published today by the Compliance Institute highlights a number of concerns businesses have about the new EU law.
41% of companies surveyed said they will struggle to provide the data demanded by the new law, while almost 60% said the new law will have a significant or huge impact on their business.
The research also reveals a lack of understanding among businesses when it comes to the new rules.
Almost half of the companies surveyed were unaware that they will be independently audited as a requirement of the CSRD, while 7% said they didn't understand the new rules.
"It's surprising that such a large number of respondents are unaware of one of the most significant aspects of the legislation which is that independent auditing will now become a feature," said Michael Kavanagh, CEO, Compliance Institute.
"The CSRD makes it mandatory for the information produced by companies covered by this law to be subject to external assurance by an independent third party. Any company that is found to not compliant to any extent could face harsh penalties," he added.
Mr. Kavanagh urged companies who have not yet done so, to make it their priority to get up to speed on, and comply with their obligations.