The legal framework for environmental sustainability reporting in the European telecommunications industry (No. 532)

Sustainability reporting is not only an instrument of transparency, but also to a large extent a legal obligation ruled by European and national regulations. In particular, the EU Non-Financial Reporting Directive (NFRD) and its follow-up regulation, the Corporate Sustainability Reporting Directive (CSRD) as well as the EU Taxonomy are key requirements that oblige companies to publish detailed information on their environmental impact and objectives. In addition, voluntary international standards and their industry-specific guidelines play an important role in the design of reporting.

The CSRD introduces significantly stricter requirements and replaces the NFRD to ensure more comprehensive and comparable sustainability reporting. It requires more detailed data collection and introduces the new ESRS standard (European Sustainability Reporting Standards). The current reporting on environmental sustainability of many European telecommunications companies is based on globally widespread, voluntary standards such as GRI, SASB or TCFD. The transition to a mandatory application of the new standards thus represents considerable challenges in terms of the complexity and level of detail of data collection.

Furthermore, there is still a need for greater standardization of the indicators, taking into account the specific characteristics of telecommunications in order to achieve a higher level of comparability and transparency. This is to be addressed with the current development of a Code of Conduct as a voluntary commitment, which is to be finalized by 2025. 

A central target of the telecommunications industry is that the large contribution of its network infrastructure to digitalization and climate neutrality should be recognized by the EU taxonomy, as these services have not yet been declared as sustainable activities with implications for the conditions of financing.