EFRAG launches consultation on draft sustainability reporting standards
In another critical milestone, the European Financial Reporting Advisory Group (EFRAG) has released exposure drafts of the nascent European Sustainability Reporting Standards (ESRSs). These set out proposed requirements for European companies to report on impacts, opportunities and risks across a range of environmental, social and governance (ESG) topics. When finalised, these standards will apply to disclosures made under the EU’s Corporate Sustainable Reporting Directive (CSRD), which promises to expand mandatory sustainability reporting to a much greater number of European companies than the current Non-Financial Reporting Directive. A 100-day public consultation on the exposure drafts is now open, with responses due by 8 August 2022.
The draft standards were developed by an interim Project Task Force (PTF-ESRS), for handover to a permanent EFRAG structure when in place. This transition to a two-pillar governance structure, incorporating both sustainability and financial reporting, has now reached completion. We join EFRAG in congratulating the PTF-ESRS and all others who contributed on their herculean efforts in the development of the drafts.
In EFRAG’s words, the exposure drafts are the first step on the “journey towards a faithful representation of sustainability performance.” The disclosures, which will be made in a machine-readable digital format, are intended to maximise comparability across industry sectors, while also allowing for sector-specific and entity-specific information. EFRAG strongly encourages stakeholders to respond in full to the sections of the consultation dealing with the overall architecture and content of the EFRSs and with their implementation, and on specific disclosure requirements as relevant.
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