The European Commission presented, on Friday 3 July, its draft delegated act revising the European Sustainability Reporting Standards (‘ESRS’), which are intended to inform financial investors about the exposure of large EU companies (more than 1,000 employees and annual turnover exceeding €450 million) to social, environmental and governance risks (see EUROPE 13863/21).
Following the agreement by the European legislator on the ‘Omnibus I’ package, which revised the ‘CSRD’ Directive governing corporate sustainability reporting (see EUROPE 13769/1), this delegated act reduces the administrative burden for eligible companies by reducing by 60% the number of mandatory data points to be provided, according to the European Commission.
The text provides clear instructions on how to apply the ‘materiality’ principle in order to ensure that eligible companies disclose only information that is material under the Sustainability Reporting Standards. They are no longer required to meet the specific information needs of each individual user, the objective of the Standards being to ensure the disclosure of information useful to users for their decision-making.
It also incorporates new provisions from the ‘Omnibus I’ package allowing eligible companies to omit certain information in certain circumstances, notably where disclosure would be seriously prejudicial to the company’s commercial position.
Voluntary act. The EU institution also presented a second delegated act establishing voluntary sustainability reporting standards for small companies not covered by the ‘CSRD’ Directive.
This text, based on the technical recommendations of the EFRAG consultative group, introduces a mechanism preventing large companies subject to the ‘CSRD’ Directive from requiring small companies in their value chain to provide data going beyond that covered by the voluntary standards (value chain cap).
See the draft delegated acts and their annexes: https://aeur.eu/f/mpe (Original version in French by Mathieu Bion)