CSRD ongoing trilogues
On 2 June, rapporteur Pascal Durand (RE/France) reported back to the European Parliament’s (EP) Legal Affairs Committee (JURI) on the ongoing CSRD negotiations. MEP Durand noted that negotiators are still having difficulties reaching a compromise on:
- non-EU companies’ inclusion in the scope
- equivalence requirements
- mandatory audit split for provision of assurance services
The rapporteur also noted that negotiators are close to reaching a compromise on listed small and medium-sized enterprises (SMEs), subsidiaries exemption and provision of limited and reasonable assurance services.
The last political trilogue is likely to take place on 21 June.
ECON votes on the EC’s green bond standard proposal
On 16 May, the EP’s Economic and Monetary Affairs (ECON) Committee adopted its position on the EC’s green bond standard proposal (with 44 votes in favour, 12 votes against and three abstentions). ECON also voted in favour of entering trilogues (with 46 votes in favour, 12 votes against and one abstention).
The EP proposes to, amongst other points:
- extend the scope to other bonds – environmentally sustainable, sustainability-linked bonds
- require issuers to publish transition plans that are compatible with EU climate goals
- align with the EU Taxonomy on the use of proceeds
- require a positive audit opinion by an auditor on the alignment of the transition plans before issuing an EU green bond or sustainability linked bond
- require post-issuance external review of allocation report after the full allocation of proceeds, but introduce an optional external review requirement for the impact report
- consider assessment activities as non-audit service under Art 5 para 1 of Audit Regulation
- introduce a civil liability clause for issuers whose failure to comply leads to the depreciation of green bond
MEPs to object the EU Taxonomy Complementary Delegated Act
MEPs from Christian Democrats, Social & Democrats, Liberals, Greens and the Left groups tabled a draft motion for a resolution objecting the EC’s complementary Delegated Act (DA). The DA proposes including nuclear energy and fossil gas in the EU taxonomy to be considered as transitional activities. The DA has received strong criticism since its adoption by the EC in February. The ECON Committee and Environment, Public Health and Food Safety (ENVI) Committee are expected to vote on the motion for a resolution on 14 June. The EP will have to vote on this at the plenary in July.
Ahead of the vote, the EP’s ECON and ENVI Committees held a public hearing on the Taxonomy DA. Read more
EC responds to ESAs queries on the SFDR
The European Supervisory Authorities (ESAs) submitted questions to the EC asking for clarification on the Sustainable Finance Disclosure Regulation (SFRD) and the Taxonomy Regulation’s interpretation. Specifically, ESAs asked to clarify the:
- principle adverse impact disclosures
- financial advisers
- good governance
- scope of the Taxonomy Art 5-6
Read the EC’s response
EFRAG continues its work and starts outreach on ESRS
The European Financial Reporting Advisory Group (EFRAG) published the Basis for conclusions (BfC) for the European Sustainability Reporting Standards (ESRS) Exposure Drafts (EDs). The BfC accompanies the EDs and provide the objective and context of the ESRS.
As part of the ESRS public consultation, EFRAG is organising five outreach events with national organisations and 13 educational sessions to inform about the proposals. The links to follow these events online and access the respective recordings are available in EFRAG’s website.
In addition, EFRAG invited preparers to test the proposed requirements in the ESRS EDs. The questionnaire contains modules on the elements of ESRS and should be delivered to EFRAG on 30 June.
EFRAG extended the deadline of its call for tenders for assistance on the cost-benefit analysis of the first set of ESRS from 28 April 28 to 27 May. The ESRS cost-benefit analysis is a part of the Technical Advice on ESRS that EFRAG will deliver to the EC.
Lastly, EFRAG launched a public call for tenders for assisting in analysing the feedback from its public consultations on draft ESRS and delivering the report by 9 September. The applications deadline is 27 June.
EFRAG calls for candidates to enhance its sustainability reporting pillars
EFRAG opened two new seats for the Sustainability Reporting TEG for members with expertise on SME and social topics. The application deadline is June 20. In addition, EFRAG launched a call for experts to participate in sector workshops and to provide input on the preparation of draft ESRS Sector-Specific standards. The application deadline for each workshop is 10 calendar days before the workshop takes place.
Due diligence should be a positive measure and not a means of punishment, says BusinessEurope
BusinessEurope published a position paper on the EC proposal for a Corporate Sustainability Due Diligence Directive (CSDDD). They raise several concerns and propose suggestions for improvements. Read more