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EU law significantly expands the catalog of companies that will have to report their impact on the environment and society. As a result of the introduced changes, the number of entities obliged to report in the European Union will increase to 50,000 from the current nearly 12,000.

ESG reporting will primarily affect large companies, but many entities not directly obliged to prepare an ESG report become indirectly obliged entities due to their presence in the supply chain.

Companies can even break contracts with partners who fail to adhere to key reporting elements. The results of ESG reports will have an increasing impact on investment decisions. Already more and more VC funds are looking at the social and environmental effects of investments, and banks will also look at them soon.

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