EFRAG continues working on ESRS
The EFRAG Sustainability Reporting Technical Expert Group (SR TEG) and Sustainability Reporting Board (SRB) will consider the responses received to the public consultation on the European Sustainability Reporting Standards (ESRS). EFRAG needs to deliver the final first set of standards to the European Commission (EC) by November 2022.
Two members with special focus on SMEs and social expertise joined the SR TEG over the summer. EFRAG is also recruiting permanent and seconded (paid or in-kind) sustainability reporting professionals. The deadline for applications is 30 September 2022.
EFRAG is also establishing Community Sector Groups to allow any interested stakeholder to contribute to the development of Sector specific draft ESRS and the organisation of workshops and outreach events. Deadline to join – 7 October 2022.
EFRAG’s Proactive Agenda to address connectivity between financial and sustainability information
EFRAG also published their Proactive Agenda for 2022 – 2026, with the finalisation of the International Accounting Standards Board’s (IASB) agenda (see below). EFRAG will work on the connectivity between financial and sustainability reporting. A project on pollutant pricing mechanisms has been put in the reserve list. Read more
Institutional negotiations on the CS3D
The European Parliament’s Legal Affairs (JURI) committee exchanged views on 5 September. The rapporteur and shadow rapporteurs noted the need to:
- include the entire supply chain in the scope
- promote a risk-based assessment
- help SMEs cope with the indirect impact of the directive
Rapporteur MEP Lara Wolters (S&D/Netherlands) is expected to present a draft report by the end of October.
On 6 September, the Council’s Company Law Working Party discussed the Corporate Sustainability Due Diligence Directive (CS3D) proposal.
Czech Presidency kicks off final EU negotiations on the green bond proposal
The first trilogue on the EU green bond standard proposal (EUGB) took place in July. The meeting focused on the key issues such as:
- the EUGB scope and nature
- interplay between the EUGB and other EU legislation (CSRD, SFDR, Taxonomy)
- use of the EUGB for green securitisation and liability and link with the Prospectus Regulation
Next trilogue is expected to take place in October.
Green NGOs leave EU Sustainable Finance Platform
Five environmental and consumer NGOs walked out of the Taxonomy expert group claiming the EC has interfered politically in the EU Platform’s on Sustainable Finance work. NGOs also denounce that the EC has ignored expert recommendations without providing any scientific justifications for their decisions. Read more
SFDR regulatory standards come into force
The Sustainable Finance Disclosure Regulation (SFDR) regulatory technical standards (RTS) adopted via delegated acts were published in the EU Official Journal on 25 July. Those standards detail:
- content and presentation of information for the ‘do no significant harm’ principle
- content, presentation and methodologies for sustainability indicators and adverse sustainability impacts
- content, presentation of information for the promotion of environmental or social characteristics and sustainable investment objectives in pre-contractual documents, on websites and in periodic reports
The RTS will apply as from 1 January 2023.
EC proposes banning products made with forced labour
The proposed regulation prohibits products made with forced labour on the EU market. It is proposed to apply the ban to all products, including their components, all economic operators, economic sectors, stages of production or steps of value chains.
As next steps, the EP and the Council will start institutional negotiations.
OECD consultation to revise G20/OECD Principles of Corporate Governance
The Organisation for Economic Co-operation and Development (OECD) opened a public consultation on the Review of the G20/OECD Principles of Corporate Governance for comments by 21 October.
The objective is to update the Principles in light of recent evolutions in capital markets and corporate governance policies and practices.
OECD and G20 countries identified the following priority areas to take into consideration:
- environmental, social and governance risks management
- changes in corporate ownership and concentration
- the role of institutional investors and stewardship