MEP Pascal Durand (S&D, French) is concerned that the European Commission is lowering the ambitions of the Corporate Sustainability Reporting Directive (CSRD), on the grounds that the International Accounting Standards Board (ISSB) is preparing its climate standards. In an interview with EUROPE on Thursday 13 April, the former rapporteur of the text for the Parliament confided his doubts.
“As always, we are at the point where Europe wants to impose its vision on the world, but is worried about overshooting”, he said, citing “too many examples of delays” in European policies.
In mid-March, European Commission President Ursula von der Leyen spoke in the European Parliament about proposals to simplify and reduce reporting requirements by 25% (see EUROPE 13154/16).
The MEP questions what form this reduction will take: whether it will apply to all standards or only those that are not climate-related. He fears that Mrs von der Leyen will preempt the delegated act and thus arbitrate against standards relating to the environment, pollution and human rights, which are “European specificities”. This would de facto prioritise climate standards, which are globally agreed.
Describing this situation as “hypocritical”, Mr Durand expressed concern about “Europe’s ability to put its own standards on the table”, with these standards, in his view, being part of Europe’s sovereignty.
“The Commission must not evade the clear mandate given to it by the [co-legislating] institutions”, he said. This mandate “does not negate the Commission’s right to amend in order to simplify the European Sustainability Reporting Standards (ESRS) proposed by EFRAG”, he added.
He suspects that the Commission President is supporting the position of the CDU/CSU and German industry, which has been opposed to the CSRD from the outset. The IFRS Foundation, on which the ISSB depends, is largely financed by German companies, through the Accounting Standards Committee and the Institute of Auditors. They have increased their funding almost sevenfold, from £617,121 in 2021 to over £4 million in 2022.
Mr Durand wishes to differentiate between the development of standards and their implementation. “It is important for companies to know now what they need to implement”, he said. “There is no reason why standards should not be adopted and implementation delayed if necessary. That is why we have included a revision clause in 2027”, he concluded.
Investor associations share this concern. Represented by the European Sustainable Investment Forum (Eurosif) and Principles for Responsible Investment (PRI), they called on the Commission to preserve the timetable and integrity of the CSRD and the first ESRS, in a letter dated Thursday 6 April.
When asked about this issue on Thursday 13 April, the Commission did not wish to comment officially.
To read the letter: https://aeur.eu/f/6bh (Original version in French by Anne Damiani)