News 29th May 2024

Preparing for the CSRD: Anti-corruption and political engagement disclosures explained

Maeve Lane

Senior Research Analyst

Maeve is a Senior Research Analyst specialising in corporate integrity. She supports the operation and management of the Corporate Anti-Corruption Benchmark and helps develop the Business Integrity team's research and thought leadership projects, including examining the integral role of anti-bribery and anti-corruption in corporate sustainability.

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Related Publication

As the January 2025 deadline for first disclosures under the Corporate Sustainability Reporting Directive (CSRD) draws closer, Transparency International UK’s new report Preparing for the CSRD: ‘Corruption and Bribery’ and ‘Political Engagement’ examines the significance of this landmark EU legislation for corporate transparency.  

The CSRD requires companies in scope to publicly report information on their material sustainability impacts, risks and opportunities (identified by conducting a materiality assessment), including on ABC and political engagement. This reporting needs to be conducted in line with the accompanying European Sustainability Reporting Standards (ESRS). Our research outlines what companies can do in relation to anti-bribery and corruption (ABC) and political engagement when preparing for the CSRD.

Why is the CSRD significant for ABC?

The CSRD raises the bar on corporate sustainability reporting, with the ESRS containing around 85 disclosure requirements and over 1000 potential data points. This is important because it:

  1. Increases transparency: We can expect an increase in the amount of ABC and political engagement information companies in scope report publicly.
  2. Boosts comparability: The CSRD’s aim to standardise sustainability reporting brings much needed harmonisation to the current patchwork of reporting standards. This should provide greater clarity and comparability for users of sustainability information, such as investors, consumers and civil society organisations.
  3. Requires ‘double materiality’ reporting: Companies will need to consider the materiality of sustainability issues from the perspective of how they influence financial performance (‘financial materiality’), and also how sustainability issues are impacted (positively or negatively) by the company’s operations and value chain (‘impact materiality’). For many companies, assessing the impact of their activities on people, the planet and the economy for sustainability reporting purposes is likely to be a significant change.

Are ABC and political engagement sustainability issues?

Yes! ABC and political engagement are core sustainability topics. Their incorporation reflects that corruption has a negative impact on companies’ financial bottom lines and can equally harm the societies and environments in which they operate. Corporate political engagement (both lobbying and political contributions) carries a risk of undue influence on policy making if not conducted responsibly and transparently.

Our research published in May 2023, with the International Federation of Accountants and World Economic Forum Partnering Against Corruption Initiative (PACI), shows that 95 per cent of global companies disclose some ABC information in their sustainability reports.

Our latest research finds that, of a sample of 90 UK listed companies, 35 per cent identify ABC and 23 per cent identify political engagement as material sustainability matters.

What are the ABC and political engagement disclosures under the CSRD?

Companies which identify “corruption and bribery” and “political engagement” as material will need to report in line with ESRS G1 Business conduct. This could include reporting information on:

  • The company’s “system to prevent and detect, investigate, and respond to allegations or incidents relating to corruption and bribery”.
  • The “nature, scope and depth of anti-corruption or anti-bribery training programmes offered or required”.
  • The “number of convictions for violation of anti-corruption and anti-bribery laws”.
  • The company’s lobbying activities (types and purposes); and its political contributions (financial or in-kind).

Our mapping document contains a full list of ABC and political engagement disclosure requirements in the ESRS and other key sustainability reporting standards. This mapping provides an overview of what companies may already be reporting and can be used to help boost corporate transparency on corruption-related matters.

What should companies do now?

There’s lots companies can be doing to prepare for the evolving sustainability reporting expectations (including for companies not directly subject to the CSRD):

  1. Assess the impact and financial materiality of ABC and political engagement, regardless of the company’s sector. If not determined to be material matters, consider providing an explanation of why not.
  2. Involve internal and external stakeholders in the materiality assessment process, include anti-corruption and compliance expertise and consult them in line with international standards. By seeking a broad range of insights, companies gain a more complete picture of their sustainability impacts, risks and opportunities.
  3. Commit to transparency by reporting comprehensive sustainability information, and the methodology used to assess materiality. This will help users of a company’s sustainability information more clearly understand its priorities and how these connect to the company’s business strategy.

The CSRD brings significant changes in how companies should evaluate and communicate sustainability information, including relating to ABC and political engagement. This is a positive step for corporate transparency and should enhance the utility of corporate disclosures. Now, the ball is in the court of companies to adapt and adjust to these new reporting and materiality assessment horizons.

Our Business Integrity Forum provides companies with the space to discuss how topics like CSRD are relevant to their ABC work. If you’d like to find out more about our corporate membership, contact [email protected]