A collective of key investor-related stakeholders have published a joint statement urging the EC to reconsider its proposed changes to the ESRS.
The modifications, they argue, will hamper investors’ capacity to access crucial sustainability-related data needed for investment decisions, and further complicate their own reporting obligations under the EU’s Sustainable Finance Disclosure Regulation (SFDR).
Set to apply from early 2024, the Corporate Sustainable Reporting Directive (CSRD) aims to significantly enhance the current EU sustainability reporting framework. This directive will increase the number of companies obligated to provide sustainability disclosures from approximately 12,000 to over 50,000, and will usher in more detailed reporting requirements on impacts on the environment, human rights, social standards, and sustainability-related risks. However, the proposed ESRS changes, announced in June 2023 by the EU Commission, could dilute these requirements, effectively allowing companies to focus reporting on sustainability factors that they deem material to their operations.
Eurosif Executive Director Aleksandra Palinska said, “The first set of the European Sustainability Reporting Standards, as published by the European Commission on 9 June, fails to address investors’ needs and risks undermining the effective implementation of the EU sustainable finance regulatory framework.”
AFME Managing Director, Sustainable Finance, Oliver Moullin said, “To ensure that financial institutions can effectively comply with their reporting requirements, it is essential that the Commission provides a solution to enable them to report effectively where relevant metrics have been omitted by their counterparties due to not being assessed as material.”
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