In the proposal for the Corporate Sustainability Reporting Directive (CSRD) adopted to strengthen sustainability reporting, the European Commission (EC) introduces an EU-wide requirement for limited assurance on sustainability information.
This FAQ provides answers to recurring questions on sustainability information assurance, specifically on:
The questions and answers aim to inform stakeholders about assurance on sustainability information. Read more
The EC published its Work Programme for 2022, reiterating its commitment to continue with the implementation of the European Green Deal. Amongst other points, the EC underlined that green bonds play a key role in driving the decarbonisation of the European economy. Read more
The European Securities and Markets Authority (ESMA) published its 2022 work programme. ESMA lists sustainable finance as a cross-cutting theme to help achieve its objectives of enhancing investors’ protection and promoting stable and orderly financial markets. For that purpose, ESMA will develop rules on environmental, social, governance (ESG) disclosures and risk identification methodology for ESG, contribute to the work on sustainability reporting, and cooperate with national authorities to prevent the risk of greenwashing. ESMA will continue ensuring that ESG factors are considered in the EU single rulebook. Read more
ESMA’s enforcement priorities for 2021 annual financial report include:
The European Court of Auditors (ECA) published a report on Sustainable Finance. The report signals that more consistent EU action is needed for capital to flow. ECA recommends that the EC:
The European Parliament’s (EP) political group of Greens sent an open letter urging the EC to consider the following proposals in the context of the Fitfor55 package:
The Council of the European Union published its conclusions on climate finance ahead of the COP26 in Glasgow. The document reaffirmed the EU’s commitment for implementation of the Paris Agreement goals. In particular, the Council welcomed the progress made on the Taxonomy, sustainability-related disclosures, green bonds, and corporate sustainability reporting. International partners were also encouraged to join the International Platform on Sustainable Finance. Read more
During its plenary, the EP approved a motion for a resolution indicating the main input for the COP26 meeting in Glasgow. The MEPs are asking for climate neutral economies for all the G20 countries. Specifically, they ask for at least 100 billion dollars invested in climate finance for developing countries, and a five-year timeframe to accelerate the pace of climate action. In the motion, MEPs also underlined the importance of further development and promotion of climate and sustainability-related financial disclosures by financial institutions and companies. Read more
The European Central Bank (ECB) made a climate stress test on four million companies and 1600 banks in the euro area. The results showed that:
In its plenary, the EP voted on two motions for a resolution (ID Group and ECR Group) objecting the Taxonomy Climate Delegated Act (DA). The DA specifies the criteria for economic activities to qualify as contributing substantially to climate change mitigation and adaption, and whether they cause significant harm to other environmental objectives. Around the same time, the Economic and Monetary Affairs (ECON) and the Environment, Public Health and Food Safety (ENVI) committees held a joint vote on a motion for a resolution objecting the EU Taxonomy Disclosure DA supplementing Article 8 on disclosure obligations. The majority of MEPs in the plenary and the committees voted against the objections.
Several NGOs signed an open letter to the EC asking for the exclusion of fossil gas from the Taxonomy. The NGOs fear that including those in the Taxonomy will undermine the credibility of the tool and it will represent a step backwards for the sustainable transition of EU economy. Read more
The EC issued 12 billion euros of green bonds within the framework of NextGen EU. According to the EC, this is expected to fund the sustainable economic recovery from COVID-19 through green projects and investments. The NextGen EU green bond programme foresees to issue 250 billion euros in green bonds by the end of 2026. Read more
Eleven Expert Working Groups (EWG) composed of sustainability experts are expected to provide input for the development of draft European sustainability reporting standards. The decision on the EWGs composition is expected by the end of October 2021. Read more
Representatives of the European Trade Union Confederation (ETUC) and several other major trade union organisations (EPSU, EFFAT, IndustriAll Europe and UNI Europa) met with the cabinet of Commissioner Thierry Breton on 30 September to express their concerns about the delay in EU action on Sustainable Corporate Governance.
They are particularly worried about the postponement of the legislative proposal that was expected to be presented in June. They made clear that further delaying the initiative is unacceptable. They called on the EC to introduce mandatory due diligence, accompanied by dissuasive sanctions. Read more
After a considerable delay, the EC is now expected to launch its proposals on 8 December. The proposals will look into: i) the rules for supply chain due diligence, and ii) directors’ sustainability duties. In an effort to strengthen the momentum for reforms, Justice Commissioner Didier Reynders stated in a public event that the proposals are expected to be as ambitious as the EC intended initially.
The IFRS Foundation made 3 important announcements in COP26:
The ISSB will have a global presence. The seat of the Board and the office of the Chair will be in Frankfurt. Key functions supporting the Board will be in Montreal. Offices in San Francisco, where the VRF is located, and London, where the IFRS Foundation is located, will provide technical support and platforms for market engagement and deeper cooperation with regional stakeholder. There are ongoing discussions for offices from Beijing and Tokyo to cover the ISSB’s footprint in the Asia Oceania region.
The IFRS’ Technical Readiness Working Group (TRWG) was created to do preparatory work for the proposed International Sustainability Standards Board (ISSB).
The purpose of the TRWG is to give the ISSB a running start to develop sustainability reporting standards that meet investors’ needs and focus on the enterprise value. Read more
In his inaugural speech, Andreas Barckow, IASB Chair, noted the need to ensure connectivity between financial and sustainability reporting, and accordingly between IASB and ISSB. Read more
The US SEC’s “Dear Issuer” letter provides some examples on the comments that the Division may issue for companies regarding their climate-related disclosure or the absence of such disclosure. Read more
The Danish insurance and pension industry adopted common measurement points for CO2 emissions from investment assets, damage prevention, active ownership and the use of paper in everyday life. Read more
ACCA conducted a survey over the future of accountancy profession involving 2000 finance professionals. It emerged that the profession will be key for the transition towards sustainable business models by helping -amongst others- organisations create, protect and report sustainable value. Read more
The FRC’s FAQs aim to inform UK company stakeholders of developments in sustainability standard setting by the International Financial Reporting Standards Foundation (IFRS Foundation). Read more
The FRC Lab report includes the status of current reporting against the TCFD framework in the UK, as well as practical advice and examples that better address aspects of TCFD reporting. Read moreThis curated content was brought to you by Vita Ramanauskaité, Accountancy Europe senior policy advisor since 2015. You can send her tips by email, follow her on Twitter and connect with her on LinkedIn.