The European Financial Reporting Advisory Group (EFRAG) has delivered the first set of draft European sustainability reporting standards (ESRS) to the European Commission.
The ESRS Exposure Drafts (EDs) prepared by the EFRAG Project Task Force on European Sustainability Reporting Standards (EFRAG PTF-ESRS) during the period from June 2021 till April 2022 were exposed for comments from 30 April to 8 August 2022. The EFRAG Sustainability Reporting Board (EFRAG SRB), advised by the EFRAG Sustainability Reporting Technical Expert Group (EFRAG SR TEG), addressed the feedback of the consultation and amended accordingly the twelve draft ESRS that are released today to European Commission. The European Commission will now consult EU bodies and Member States on the draft standards, before adopting the final standards as delegated acts in June 2023, followed by a scrutiny period by the European Parliament and Council.
In April 2021, the European Commission adopted a legislative proposal for a Corporate Sustainability Reporting Directive (CSRD) that requires companies within its scope to report using a double materiality perspective in compliance with European Sustainability Reporting Standards (ESRS) adopted by the European Commission as delegated acts. Under the proposed CSRD, EFRAG was appointed technical adviser to the European Commission developing draft ESRS. This was confirmed by the text of 21 June resulting from the trilogue between the co-legislators and the text of 10 November 2022 approved by the European Parliament.
The reporting requirements will be phased in over time for different kinds of companies. The first companies will have to apply the standards in financial year 2024, for reports published in 2025. Listed SMEs are obliged to report as from 2026, with a further possibility of voluntary opt-out until 2028, and will be able to report according to separate, proportionate standards that EFRAG will develop next year.
The publication of the draft standards is accompanied by: a Cover letter, a Due process note setting out the process applied and the main differences between the exposure drafts and the draft ESRS, an Explanatory note, including its Annex, of how draft ESRS take account of the initiatives and legislation listed in Article 1 (8) of the CSRD adding article 29 (b) –5 to the Accounting Directive, EFRAG’s Cover Letter on the Cost–benefit analysis of the First Set of draft ESRS, a Cost–benefit analysis of the First Set of draft ESRS prepared by CEPS and Milieu and six appendices. The bases for conclusions will be
published in December
