The CSR Europe’s Markets Leadership Hub recommendations to make the European Sustainability Reporting Standards (ESRS) work for business, have been welcomed in the Delegated Act adopted by the European Commission on 31st July.
As requested by the Leadership hub members, the legislative text:
Re-states the importance of timely adopting implementation guidelines, especially for double materiality and value chain
Clarifies the alignment of the ESRS requirements with other EU legislation, such as the Sustainable Finance Disclosure Regulation (SFDR).
Clarifies the concept of financial materiality, aligning the terminology with the one used by the International Financial Reporting Standards (IFRS)
Includes a clause in the materiality section calling for a thorough justification when a reporting body decides that climate change is not a material topic
In the open letter to European Commissioner McGuinness, and the response to the public consultation – both dated 6th July – Hub’s members Enel, Forética, Leonardo, Solvay, TITAN Cement, UnipolSai, technically supported by Knowledge Partners FTI Consulting and World Benchmarking Alliance, expressed unwavering support to the EU regulators’ action for enhancing harmonization with other global standard setters.
However, they highlighted the need for stronger efforts in promoting and aligning ambitions, expectations, and timelines with the EU legislative framework. Furthermore, they called for adequate support and interpretation measures for businesses, both in terms of guidance and capacity-building initiatives, especially on financial materiality, for SMEs and first-time preparers. Finally, they emphasized the significance of consistently monitoring compliance levels and regularly assessing the qualifications and expertise of the national bodies engaged in the process. This dual approach guarantees the efficacy of the ESRS in fostering substantial and impactful change.
The letter received the endorsement of other CSR Europe members Impronta Etica, SES Satellites, GRACE, and Responsible Business Forum Poland.
The Markets Leadership Hub will meet on September 14th to discuss the final version of the published Delegated Act and define how multinational enterprises can leverage their knowledge and support SMEs in their reporting journey.
Furthermore, members will also align on CSR Europe’s policy proposal to EU policymakers for 2024-2029 ahead of the second Sustainability Leadership Salon, taking place on November 14th.