European standards for sustainability reporting

Subject: European standards for sustainability reporting

As of the 2024 financial year, certain companies will be obliged to implement and comply with the ‘European Sustainability Reporting Standards’ (ESRS). These uniform European standards affect a company’s entire business. In a few months the first categories of companies will be required to implement the ESRS. There have been increasingly loud calls from the business community that the ESRS are overly bureaucratic. Under the ESRS, companies must state how sustainable their suppliers are across the entire value chain, from the raw materials used onwards.

1. Has the Commission met with representatives from the business community, and how does it respond to this criticism of excessive red tape?

2. What proposals does the Commission have for businesses to deal with this insane amount of bureaucracy?

3. What outcome does the Commission expect this initiative to have, and to what extent is it intended to curb pollution and help protect the climate?

Submitted: 6.9.2023

Answer given by Ms McGuinness on behalf of the European Commission (16 November 2023)

Representatives of European companies are closely involved in the development of the European Sustainability Reporting Standards (ESRS).

The European Financial Reporting Advisory Group (EFRAG) advising the Commission on the ESRS includes representatives from BusinessEurope and small and medium-sized enterprises.

The Commission had numerous meetings with business representatives and other stakeholders on the ESRS. In 2022, EFRAG ran a consultation on the draft ESRS.

Further to its consultation, EFRAG reduced the number of disclosure requirements by nearly half. In June 2023, the Commission published the proposed final version of the ESRS for a period of public comment. Companies and business associations accounted for over 50% of responses, and their comments led to important modifications to the standards.

The Commission expects the ESRS to achieve the policy objectives established in the Corporate Sustainability Reporting Directive (1) as agreed by co-legislators.

This includes rationalising sustainability reporting expectations on companies, ensuring that investors get the information necessary to understand the sustainability risks to which companies are exposed, and increasing transparency about company impacts on people and the environment.

1 ∙ ⸱ OJ L 322, 16.12.2022, p. 15-80. | | ( | | )