Emmanuel Faber, Chair of the International Sustainability Standards Board (ISSB), confirmed, on Friday 31 March, that there will be no equivalence between international and European Sustainability Reporting Standards (ESRS) (see EUROPE 13130/12), at a conference organised by the Bruegel think tank.
The ‘CSRD’ directive on corporate sustainability reporting (see EUROPE 13069/25) “is about political requirements, while we are about investors and market functioning”, he stressed. “So that cannot be equivalent. If that was equivalent, we wouldn’t have been working on interoperability”, he continued.
However, together with John Berrigan, Director General for Financial Services (DG FISMA) of the European Commission, he assured that the working objective was to “avoid double reporting on anything similar”. Mr Berrigan explained that it was difficult to align with the ISSB, as “the scope of the ESRS is wider”.
The ESRS are in fact developed by EFRAG according to the principle of double materiality, i.e. they take into account not only the effects of the climate on companies, but also the impact of companies on the climate. The ISSB only considers the first point.
For Massimo Romano, Head of Group Integrated Reporting, Generali, it is important that there is automatic compliance. “Otherwise there will be additional costs”, he warned.
The ESRS will be applicable from 2025 onwards on the basis of 2024 financial data. “The Commission has asked EFRAG to slow down to allow the market time to absorb the new standards”, Mr Berrigan said.
Mr Romano also welcomed the creation of the European Single Access Point ‘ESAP’ (see EUROPE 13111/18), which will be a good tool for accessing business information.
In mid-March, the President of the European Commission, Ursula von der Leyen, spoke in the European Parliament about proposals to simplify and reduce reporting requirements by 25%. “We will therefore look beyond departmental boundaries to see what really makes Europe more competitive and what we can do without”, she continued. When asked about this, Mr Berrigan said: “We must (...) be careful not to overburden businesses”.
The Commission is expected to present concrete proposals by the autumn.
Mr Berrigan concluded: “We need to find that balance where the companies are not overburdened, but they provide the adequate amount of information to actually attract the customers that they want”. (Original version in French by Anne Damiani)