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.
On Tuesday, October 6th, Filip Gregor, Head of our Responsible Companies section spoke at the conference on ‘Global Supply Chains - Global Responsibility: Human Rights and Decent Work in Global Supply Chains’ organised by the German Ministry of Labour and Social Affairs on the occasion of the German EU Council presidency.
Executive Vice President Valdis Dombrovskis already announced in January that following the publication of the Green Deal and the initiation of the revision of the EU Non-Financial Reporting Directive (NFRD), he would invite EFRAG to “undertake preparatory work for the elaboration of possible EU non-financial reporting standards”.
A group of leading organisations in the field of sustainable finance, including Frank Bold, issued a joint statement with recommendations for the upcoming revision of the Non-Financial Reporting Directive*.
