European companies can now take a look at the draft sustainability reporting standards they will report against in the coming years. The drafts were developed by the EFRAG Project Task Force on EU Sustainability Reporting Standards, with the participation of two Frank Bold representatives - Head of the Responsible Companies Section Filip Gregor, and Joanne Houston, from Frank Bold's Brussels office. Both experts will continue contributing to the development of the EU standards as members of the newly established EFRAG Sustainability Pillar.
The Project Task Force completed its work and published its draft standards in the form of Exposure Drafts at the end of April 2022. These are now open for public consultation until 8 August 2022. The recently launched EFRAG Sustainability Pillar will take over the work of the EU Project Task Force in order to finalise the standards before submission to the EU Commission. Frank Bold experts will continue their involvement in the permanent EFRAG structure.
In March, Filip Gregor was appointed to the EFRAG Sustainability Reporting Board. The Board will be responsible for all sustainability reporting positions of EFRAG, including advice to the European Commission on draft EU Sustainability Reporting Standards and related amendments. Gregor is one of two NGO representatives in the Board, alongside David Vermijs from Shift, a member organisation of the Alliance for Corporate Transparency, led by Frank Bold.
Joanne Houston from Frank Bold's Brussels office will also continue her work on the standards as a member of the newly formed EFRAG Technical Expert Group. The group will provide technical advice on the draft EU Sustainability Reporting Standards, further develop them, and ensure connectivity between financial and sustainability reporting.
The binding EU standards are expected to be adopted in the first half of 2023, and will apply as of financial year 2024.
The European Union is not the only entity developing sustainability reporting standards. As sustainability data is required by investors worldwide, standards for sustainability reporting are also being developed at a global level. Read about the differences between EU and international standards in our article.
How European and global sustainability reporting standards can and will converge
Alongside the development of the standards, trialogue negotiations between the EU Council, Parliament, and the Commission on the Corporate Sustainability Reporting Directive (CSRD) are ongoing. The final content of the Directive is likely to be known by the end of May 2022. Under the Commission's initial proposal, the reporting obligation is to be extended to all large companies with more than 250 employees and listed SMEs.
Local groups and NGOs including Frank Bold, that is very active in the process, welcomed the Czech government’s decision to file a lawsuit at the European Court of Justice against the Polish government for the illegal operation of the Turów lignite coal mine, which has been dug right up to the Czech and German borders, damaging local water supplies for nearby communities. This is the first such legal case for the Czech Republic and the first in EU’s history where one member state sues another for environmental reasons.
Meeting the goal of the European Green Deal to achieve no net GHG emissions by 2050 requires at least half trillion euros of additional investments in the EU every year and will involve significant market and regulatory changes targeting every sector of the economy. This will profoundly change how companies and their directors need to integrate sustainability concerns in their strategies and business decisions.
Frank Bold organised two online events to present the results of the research on the disclosures made by 300 companies on climate and environmental matters providing targeted presentation and insights for companies in Southern Europe and Central and Eastern Europe.
