Accountancy Europe shares 10 principles to ensure simplification reforms are genuine and impactful for businesses
Accountancy Europe publishes papers and interviews on assurance practitioner’s role in double materiality, value chain & transition plans for CSRD implementation
The Corporate Sustainability Reporting Directive (CSRD) requires companies to draw up sustainability reports in accordance with the European Sustainability Reporting Standards (ESRS). According to the CSRD, these reports will also be subject to assurance. The first sustainability reporting and assurance reports will be published in 2025, based on 2024 data.
Professional assurance standards such as the International Standard on Sustainability Assurance (ISSA 5000) or CEAOB guidelines outline principles for sustainability reporting assurance engagements. The European Commission (EC) will adopt an EU limited assurance standard to define expectations for practitioners conducting limited assurance engagements in the EU on the basis of CEAOB technical advice including adds-on and possible carve-outs to ISSA 5000 (see EC letter to CEAOB).
We share some key aspects on the assurance practitioner’s approach to double materiality assessment, value chain information and transition plans to contribute to the CSRD implementation and readiness debate.
These three short papers are meant to provide a high-level explanation of the limited assurance approach rather than a detailed roadmap of procedures. They are primarily addressed to stakeholders such as users of assurance and structured in three parts:
➡️ Links to papers:
We also interviewed professionals working in practice to hear their insights on the three topics. Watch the first video interview.
The EC issued FAQs to facilitate interpreting and applying specific legal provisions in the EU Taxonomy for sustainable activities to reduce compliance costs and contribute to the regulatory burden reduction agenda. These FAQs clarify technical aspects of the technical screening criteria for new activities within the EU Taxonomy Climate and Environmental Delegated Acts and the general ‘Do No Significant Harm’ (DNSH) criteria and related reporting requirements.
The European Parliament (EP) Environment, Public Health, and Food Safety (ENVI) and Internal Market and Consumer Protection (IMCO) Committees voted in favour of starting the negotiations with the Council on the Green Claims Directive. The EP had its position adopted earlier this year that includes:
The next steps in the legislative procedure include the Council adopting its position.
The Council approved a regulation on environmental, social, and governance (ESG) rating activities, after the provisional agreement reached in February 2024. The regulation aims to enhance ESG rating activities’ consistency, transparency, and comparability in the EU.
ESG rating providers will have to comply with transparency requirements, i.e. on their methodology and information sources. The European Securities and Markets Authority (ESMA) is mandated to authorise and supervise ESG rating providers in the EU. The regulation also introduces the principle of separation of business and activities to prevent conflicts of interest.
The ESG rating activities regulation will apply 18 months after its entry into force.
The Council adopted a regulation prohibiting products in the EU that are made using forced labour. The regulation forbids the placing, making or the export from the EU of any product made using forced labour.
Following the Council’s approval, the legislative act has been adopted. The regulation will be published in the EU Official Journal and will enter into force on the day following its publication. It will apply three years after its entry into force.
On 3 December, the Council and the EP reached a provisional agreement on a targeted amendment to the EU Deforestation Regulation, postponing its application date by 12 months. This delay aims to ensure legal certainty, predictability, and adequate time for the smooth and effective implementation of the rules. It also allows for the full establishment of due diligence systems covering all relevant commodities and products.
The provisional agreement does not alter the substance of the existing rules. The amendments proposed by the European People’s Party (EPP) and approved by the EP were ultimately rejected following strong opposition from the EC and Member States.
The agreement will now require formal endorsement by both the Council and EP. Once adopted, it will be published in the EU Official Journal, ensuring it enters into force before the current regulation’s application date of 30 December 2024.
ESMA issued a consultation paper to gather stakeholders’ input on applying the European Single Electronic Format (ESEF) to sustainability reporting and easing the burden linked to financial reporting. It includes:
Stakeholders can provide their feedback by 31 March 2025. ESMA plans to publish a final report in Q3 2025 and to submit the draft technical standards to the EC for approval.
The International Sustainability Standards Board (ISSB) issued a guide to help companies identify and disclose material information about sustainability-related risks and opportunities (R&O). It also includes connectivity with financial statements and interoperability considerations with the European Sustainability Reporting Standards (ESRS) and the Global Reporting Initiative (GRI). The guide emphasises that:
The International Ethics Standards Board for Accountants (IESBA) approved two key sets of standards to strengthen public trust in sustainability reporting and assurance:
Additionally, the Board approved a project plan to develop a new standard on accounting firm culture and governance, focusing on ethical leadership and accountability.
Council
Council greenlights EU certification framework for permanent carbon removals, carbon farming, and carbon storage in products
ESA
Fit-for-55 climate scenario analysis
Frank Bold
Research: are businesses embracing the ESRS and how can policymakers avoid creating legal uncertainty around its application
Harvard Law School Forum on Corporate Governance
What to expect from the mandatory sustainability disclosure standards for non-EU companies
Corporate Disclosures
UK TAC finalises advice on UK ISSB adoption
OECD
OECD alignment assessments of sustainability initiatives in an evolving regulatory context
EY
How can investors balance short-term demands with long-term sustainability? - EY Institutional Investor Survey
