Standards for sustainability reporting approved by EFRAG
#CSRD • 15/06/2023 • Marije Jennes & Tine SteensAfter the Corporate Sustainability Reporting Directive (CSRD) was approved by the European Parliament on 10 November, another important step in European legislation concerning sustainability reporting follows: the European Sustainability Reporting Standards (ESRS). The European Financial Reporting Advisory Group (EFRAG) released the first set of the ESRS. These are standards that serve as guidelines for applying the directive.
Technical criteria
The CSRD requires large companies to publish an annual report on their impact on people and the planet from 2025 onwards and shows where the bar is set for such reporting. To this end, the ESRS define the technical criteria that determine what and how to report. You can think of them as the guidelines for putting the CSRD into practice.
The ESRS includes two general standards and ten thematic standards that focus on the domains of environment (E), social (S) and managerial policy or governance (G).
What changed compared to the draft version?
- There are about 40 per cent fewer data points. That number has been reduced from 2161 to 1144. The number of disclosure requirements has also been reduced from 136 to 84.
- There is a narrower focus on governance. That domain now includes only one standard. There is additional clarification on the information about the value chain. Here, too, the materiality analysis prevails. A three-year transition period has been set for several indicators.
Read our blog article on double materiality here.
In the following months, EFRAG will focus on a second set of draft ESRS: the sector-specific standards. These standards include criteria for the agriculture and mining sector, the oil and gas sector, the energy and road transport sector, the food industry and the textile sector. This set will also include standards for SMEs.
How can you prepare for this as a company?
Thanks to our gap analysis, you will find out which steps you still need to take to comply with the CSRD. In any case, performing the double materiality analysis to identify material impacts, risks and opportunities is a crucial first step.
How does this continue?
A draft version of the ESRS was published in April 2022. Anyone who wanted to, could read it and provide feedback. EFRAG has processed the feedback and has now released the final version. You can access the standards here. The European Commission is now consulting EU agencies and the member states. The final standards will be adopted in the form of delegated acts in June 2023.
Do you need help with performing a CSRD gap analysis or a double materiality analysis, or defining an ESG strategy or roadmap? Contact us via mail@pantarein.be.
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