IFAC advocates for transparency and interoperability in response to ESRS

Posted on July 14, 2023 by Editor

The International Federation of Accountants (IFAC) has submitted feedback on the European Commission’s (EC) European Sustainability Reporting Standards (ESRS), emphasising the importance of transparency and interoperability to support a global reporting system and avoid regulatory fragmentation.

While welcoming the ESRS and other jurisdictional initiatives, such as the International Sustainability Standards Board’s (ISSB) new standards, IFAC stresses the need for alignment in key concepts, terminologies, and metrics to ensure consistency. IFAC CEO Kevin Dancey highlights the significance of collaboration between the European Commission and ISSB, urging continued efforts to achieve interoperable standards for the benefit of stakeholders. IFAC also emphasises the importance of implementation, enforcement, and assurance to ensure the success of the ESRS.

IFAC encourages engagement with the International Auditing and Assurance Standards Board (IAASB) and the International Ethics Standards Board for Accountants (IESBA) to promote high-quality, reliable information and sustainability assurance.

Here at XBRL International we would add (as set out in our own short comment to the EC) that it is critical that the sustainability standards setters and policy makers complete the interoperability loop. It is vital that active steps are taken to ensure that the XBRL taxonomies that represent the new standards are also aligned and interoperable, following on from the work to align the standards themselves. Failing to do so will impact most preparers and all users.

Read more about IFAC’s response.

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