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CSRD Causing US Companies to Rethink Listing in the EU

In addition to California's AB 1305 climate disclosure law that goes into effect on January 1, 2024, another climate disclosure law is the EU’s Corporate Sustainability Reporting Directive (more often referred to as CSRD). This is an extensive climate-oriented disclosure. Most in the US have been focused on the fact that US companies with a certain amount of annual sales in the EU  will need to comply beginning in 2028 (reporting 2028 information in 2029).  However, the CSRD applies to certain companies that are listed on an exchange in the EU beginning on January 1, 2024 (reporting 2024 information in 2025) with smaller listed companies becoming subject in 2025 and 2026.    Thus, many US companies that have a debt or equity listing on the Frankfurt Stock Exchange or other exchange in the EU, which may be in addition to their listing in the US, are suddenly realizing the enormity of the disclosures they need to soon make. Many are considering delisting from their EU exchanges.  The Bloomberg article at the link below provides additional color.

Companies based outside Europe are reviewing securities they’ve listed in the bloc, as the implications of an overlooked clause in new ESG reporting rules sink in.