European Central Bank (ECB) President Christine Lagarde cautioned lawmakers against weakening the Corporate Sustainability Reporting Directive (CSRD).
Addressing a European Parliament committee, she stressed the importance of robust sustainability reporting for financial stability. She argued that comparable and reliable data is crucial. This data helps assess climate-related risks. It also supports the transition to a sustainable economy.
Lagarde stated, “It is essential that the CSRD requirements are not diluted. We need high-quality, comparable, and reliable sustainability information.” She emphasized the interconnectedness of climate risk and financial risk. “Climate change is a source of systemic risk. Understanding and managing this risk requires granular data from companies,” Lagarde explained.
The ECB President highlighted the role of the financial sector. It needs to channel investments towards sustainable activities. This requires clear and consistent reporting standards. “Without proper disclosure, we cannot effectively allocate capital. We cannot monitor progress towards our climate goals,” she warned.
Lagarde acknowledged the concerns raised by some stakeholders about the reporting burden. However, she insisted that the long-term benefits of transparent sustainability reporting outweigh the short-term costs. “Delaying or weakening these standards would be a mistake. It would undermine our efforts to build a resilient and sustainable financial system,” she concluded.
