EU Commission Adopted the European Sustainability Reporting Standards
Companies falling under the scope of the Corporate Sustainability Reporting Directive (CSRD) will have to use the Standards to fulfill their legal sustainability reporting obligations.
CSR Europe corporate members are invited to register for the Atelier on the armonisation of European and International reporting frameworks on 21st September to learn more.
On July 31st, the European Commission adopted the final Delegated Act concerning the European Sustainability Reporting Standards (ESRS), which will be mandatory for all companies falling under the Corporate Sustainability Reporting Directive (CSRD).
The adoption of this key text comes at the end of a long stakeholder engagement process that kept both the European Financial Reporting Advisory Group (EFRAG) and the EU Commission’s Directorate-General for Financial Stability, Financial Services and Capital Markets Union busy for almost three years. This process reached its zenith with a conclusive four-week open consultation in June.
The ESRS comprehensively address a wide spectrum of Environmental, Social, and Governance (ESG) issues, spanning from climate change to due diligence and human rights, placing particular emphasis on evaluating a company's primary impacts, risks, and opportunities.
In contrast to the draft released by EFRAG in November 2022, the approved Delegated Act introduces supplementary phase-ins for the most intricate disclosure demands and underscores the pivotal role of materiality assessment within sustainability reporting. Notably, the final text provides the greatest possible alignment with widely used reporting frameworks, such as the International Sustainability Standards Board (ISSB) and the Global Reporting Initiative (GRI), and with the priorities of the EU sustainable finance agenda, thereby setting clear ambitions and averting redundant reporting efforts.
NEXT STEPS
The adopted ESRS Delegated Act will now be sent to the European Parliament and the Council for a thorough two-month scrutiny period. It is important to note that during this scrutiny, they have the authority to reject the Delegated Act but cannot make amendments to it.
Simultaneously, EFRAG is in the final stages of completing its work on preparers' guidance concerning double materiality and value chain reporting. Additionally, EFRAG is preparing to launch a dedicated portal to address technical queries that companies and stakeholders may have regarding the practical application of ESRS.
To prepare for the upcoming requirements set by the ESRS, CSR Europe’s corporate members are invited to register for the second Markets Atelier “Harmonising European & International Sustainability Reporting Frameworks & Standards”. The event will take place online on September 21st.
For more information:
Senior Project Manager
EU Affairs
