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NGOs and civil society groups will only support an ambitious first set of sector-agnostic ESRS that closely builds on the EFRAG drafts adopted last November. They urge the Commission to follow EFRAG’s technical advice alongside 60+ companies and investors worth 651bn USD, and caution against making significant changes at this stage, as this would risk discrediting the process so far and undoing a good compromise.
ESRS are a milestone in corporate reporting towards more consistent and comparable sustainability disclosures. EFRAG’s technical advice to the European Commission provides a sound, holistic and coherent framework to achieve this objective. It was adopted without dissent by the EFRAG Sustainability Reporting Board, following an extensive multistakeholder process that drew on the expertise of all stakeholders.
Some organisations are now calling on the Commission to reduce the scope of the standards. We believe this would be a mistake since any further reduction in the scope, content or coverage of the ESRS would undermine the credibility of the process, the support of civil society and the development of sector-specific standards. The compromise reached by EFRAG after lengthy and sometimes difficult discussions represents a careful balance between different views and stakeholder interests.
In this spirit, civil society organisations would like to state that :
Due diligence under the Corporate Sustainability Due Diligence Directive (CSDDD) is designed to direct finite corporate resources towards the issues that matter most for people and the environment. At the heart of that effort is prioritisation, defined in Article 9 of the Directive. Having spoken about this topic at the RBA conference this week, I want to share some reflections on what good prioritisation looks like in practice and what pitfalls to avoid.
The Parliament proposal shows that many of the concerns raised through Frank Bold’s research and engagement with policymakers are now entering the legislative mainstream. But the negotiations ahead will determine whether the final framework is capable of addressing the structural weaknesses that continue to undermine trust in the sustainable investment market.
The European Commission has published its draft Delegated Regulation revising the European Sustainability Reporting Standards (ESRS). The revision follows the Omnibus I Simplification Package and is presented as a burden-reduction measure. Some of it is - but a closer reading reveals a set of changes that go well beyond simplification, departing from EFRAG's technical advice and disregarding formal recommendations from the European Supervisory Authorities. Many of these changes have significant implications for the quality and comparability of sustainability data available to the market and public.
