What Standards Can Influence Your Company’s Sustainability Reporting? — CSR Europe

Companies’ standards for sustainability reporting will soon be affected by three upcoming proposals issued by European and American players. First, the European sustainability reporting standards (ESRS) of the European Financial Reporting Advisory Group (EFRAG) that will become mandatory as of the fiscal year 2023. Second, the IFRS Sustainability Disclosure Standard set by the International Sustainability Standards Board (ISSB), and third “The Enhancement and Standardization of Climate-Related Disclosures for Investors” proposed by the US Securities and Exchange Commission (SEC), which are still in the consultative phase, but if passed will be binding in their scope.

While all the three reporting standards aim at providing data comparability and transparency, they have different scope of application and principles, and target different stakeholders.

The ESRS have a limited scope for European companies – although there are exemptions to the limitation – and are based on a multi-stakeholder approach rooted in GRI’s full disclosure approach. They contain sector agnostic, sector-specific, and company-specific requirements.

The IFRS Sustainability Disclosure Standards aim to be the global minimum requirement for sustainability reporting and have a focus on investors. They comprise industry specific disclosures, and currently are focused on climate only (it is planned that other topics shall follow in the future).

The Enhancement and Standardization of Climate-Related Disclosures for Investors proposed by the SEC will be applicable to SEC registrants. The focus is on investors and contains detailed requirements to report on climate only.

Figure 1: Overview of required information