Read Accountancy Europe response to this consultation
Read Accountancy Europe response to this consultation
On 15 March, the Council finally reached a final agreement on the Corporate Sustainability Due Diligence Directive (CSDDD). The approval of the final text has been postponed more than five times, while the Belgian Presidency having to introduce several changes to the provisional agreement reached in December 2023 to secure a majority among Member States. The agreement contains significant alterations introduced by the Council, including:
The European Parliament (EP) Legal Affairs Committee (JURI) provisionally approved the agreement on 19 March.
The next step in the formal legislative process is for the EP to vote the final text during the Plenary session on 24 April.
The European Commission (EC) invited the Committee of European Auditing Oversight Bodies (CEAOB) to develop non-binding guidelines to assist auditors and other assurance services providers in sustainability assurance engagements under the Corporate Sustainability Reporting Directive (CSRD). The EC noted that these limited assurance guidelines should:
CEAOB is expected to develop guidelines by the end of July 2024. The proposed guidelines should be submitted to public consultation and will eventually be adopted later in 2024.
The EC also requested CEAOB to provide technical advice on specific add-ons and possible carve-outs to ISSA 5000 for the upcoming EU assurance standard. CEAOB should deliver by May 2025.
The EC issued a communication concerning the management of climate risks, alongside the first EU Climate Risk Assessment by the European Environmental Agency (EEA). The EEA emphasises the necessity for the Corporate Sustainability Reporting Directive (CSRD) to mandate companies to explain the interplay between both branches of double materiality.
The EC communication delineates action points in four primary categories:
The EC adopted a communication outlining the outcomes of the Clean Transition Dialogues, which involved industry and social partners to support the implementation of the European Green Deal. Within this communication, the EC pledges to:
The EP approved the provisional agreement to delay the adoption of sector-specific sustainability reporting standards and reporting standards for non-EU companies by two years. However, co-legislators stressed that the EC should adopt sector-specific sustainability reporting standards in eight unspecified areas as soon as those standards are ready. The EC will determine the priority sectors.
The Council has to formally approve the text.
On 12 March, the EP adopted its position on the Green Claims Directive establishing rules for validating voluntary green claims. During a press conference, co-rapporteurs MEP Cyrus Engerer (S&D/Malta) and MEP Andrus Ansip (RE/Estonia) explained that the directive targets greenwashing and protects the environment, consumers, and businesses that concretely contribute to the environment. Key provisions of the adopted text include:
Following the EU elections, the new EP will be tasked with further advancing this file.
On 10 April, the EP adopted the provisional agreement on the voluntary certification framework for carbon removals during its plenary session. The certification framework strengthens the EU’s ability to quantify, monitor, and verify carbon removal activities. The adopted text sets out:
The Council also has to formally approve the text before it can be published in the EU Official Journal.
The Securities and Markets Stakeholder Group (SMSG) responded to ESMA’s Consultation on the Draft Guidelines on Enforcement of Sustainability Information (GLESI). SMSG recommends:
Accountancy Europe has also responded to ESMA’s consultation providing ideas for ESMA and enforcers to enhance coordination with stakeholders.
The European Securities and Markets Authority (ESMA) has released a consultation paper on draft Regulatory Technical Standards (RTS) for the registration and supervision of external reviewers under the EU Green Bond Regulation (EuGB). ESMA seeks input on the following criteria:
Stakeholders can provide their feedback until 14 June 2024. ESMA will submit the technical standards to the EC by December 2024
The European Insurance and Occupational Pensions Authority (EIOPA) published a factsheet on the investments of occupational pension funds. The figures analyse how closely Institutions for Occupational Pension Provisions (IORP) investments in equity and corporate bonds align with the EU Taxonomy of sustainable activities. According to EIOPA, 4.5% of these investments are aligned with EU Taxonomy while the 26.1% are eligible for alignment. on the investments of occupational pension funds. The figures analyse how closely Institutions for Occupational Pension Provisions (IORP) investments in equity and corporate bonds align with the EU Taxonomy of sustainable activities. According to EIOPA, 4.5% of these investments are aligned with EU Taxonomy while the 26.1% are eligible for alignment.
The International Sustainability Standards Board (ISSB) has agreed its strategic direction for its two-year work plan:
The International Ethics Standards Board of Accountants (IESBA) prioritises ethics in business judgement to increase public trust on organisations’ activities in its Strategy and Work Plan (SWP) for 2024-2027.The SWP highlights two key areas:
On sustainability-related matters, the International Organization of Securities Commissions (IOSCO) has added to its workplan:
The Organisation for Economic Co-operation and Development (OECD) launched the Global Corporate Sustainability Report examining how global market practices are evolving among listed companies. The key policy messages are:
Multiple stakeholders across different states have filed a lawsuit against the U.S. Securities and Exchange Commission’s (SEC) Climate Disclosures Rule.. As a result, the implementation of the rule is on hold pending a court decision on its constitutional and statutory validity.
EFRAG
EFRAG seeks companies to engage in transition plan implementation guidance
ESRB
ESRB publishes report on how climate-related risks are reflected in IFRS financial statements
IFAC
Equipping Professional Accountants for Sustainability
SSBJ
The SSBJ issues Exposure Drafts of Sustainability Disclosure Standards to be applied in Japan
