PRI on European sustainability reporting
UN Principles for Responsible Investment (PRI) has published a review and perspective on the current evolution of corporate sustainability reporting in the EU, and how it can best serve investors.
As it discusses, the Corporate Sustainability Reporting Directive (CSRD) aims to ensure that sustainability data is comparable, relevant and reliable – forming a fundamental foundation for a sustainable financial system. The new European Sustainability Reporting Standards (ESRSs) being developed by the European Financial Reporting Advisory Group (EFRAG) will provide the specifics underpinning the CSRD requirements. PRI welcomes the CSRD as beneficial to investors and other stakeholders.
“The CSRD determines which companies must report, on what topics, where and when – offering useful information to investors and other capital providers, civil society actors, business partners, and other stakeholders. The ESRS … will clarify the information to be disclosed for each sustainability issue and how this should be reported.”
Of course, a crucial change introduced by the CSRD that will increase the value of disclosures for investors is that information must be reported in a digital and machine-readable format – i.e., XBRL. It also has a significantly greater scope than the previous Non-Financial Reporting Directive (NFRD), and introduces an assurance requirement for sustainability data.
While the CSRD has now been finalised, the ESRSs are still under development. PRI encourages investors to continue to engage and provide feedback on the draft standards, to help ensure that disclosures under the CSRD meet their own investment information needs, as well as regulatory obligations.
Read more here.