Opinions issued on the draft European Sustainability Reporting Standards
Published 16 February 2023
Category: Impact and ESG
The European Financial Reporting Advisory Group (EFRAG) submitted a draft set of European Sustainability Reporting Standards (ESRS Set 1) to the EU Commission in November 2022. The ESRS Set 1 shall supplement the CSRD and determine the detailed sustainability reporting requirements under the CSRD. The ESRS Set 1 include reporting standards and sector specific requirements.
ESMA et al. has now issued an opinion on the ESRS Set 1. Overall, ESMA concludes that the draft ESRS Set 1 broadly complies with the objective of securing investor protection and not undermining financial stability. However, ESMA advises the EU Commission to consider and work towards improving specific focus areas such as clarifications of terminology and definitions, guidance on the process of materiality assessment and improvement of consistency with the CSRD as well as other EU legislation.
Next steps: The EU Commission is now processing the opinions given by among others ESMA. The Commission is expected to adopt the ESRS Set 1 as delegated acts this spring and before 30 June 2023. The standards are expected to apply for companies from the financial year 2024 and will be phased in going forward.