The reporting law, also called the Corporate Sustainability Reporting Directive (CSRD) represents a big step forward when it comes to company reporting. With the European Union's goal set on Net Zero 2050, companies will need to start reporting on (timing depending on size of company) their full environmental and social impact next to their financial results.
This reporting law is a key part of the European Green Deal and has the goal to make sustainability reporting more transparent and easier to compare throughout the EU. It will also increase the trustworthiness as the reporting needs to be audited and verified by external auditors. This increased clarity helps all stakeholders to properly understand a company's sustainability efforts leading to more informed decisions.
With ESG as the framework to report on, the reporting law will build on current reporting standards, segmenting environmental, social, and governance (exact measurements are written down in the framework of European Sustainability Reporting Standards/ESRS if you want to know the details).