October 2022

  • EFRAG prepares for the second set of ESRS 
  • ECON Committee update on the EU green bond final negotiations  
  • EP and Council prepare for the UN COP27 
  • ESAs propose disclosures for fossil, gas and nuclear energy investments 
  • Call for applications for the EU Platform on Sustainable Finance 

EFRAG prepares for the second set of ESRS

The European Financial Reporting Advisory Group (EFRAG) will focus on the second set of European Sustainability Reporting Standards (ESRS) upon delivering their technical advice to the European Commission (EC) on the first set of ESRS. This second set includes: 

  • sector-specific standards 
  • non-EU company standard 
  • standard for listed SMEs 
  • voluntary guidance for non-listed SMEs 
  • amendments to the first set of ESRS 

In October and November, EFRAG will be organising workshops on sector-specific standards on mining, coal, oil, and gas and for the motor vehicle, agriculture, farming and fishing sectors to inform their work. 

The EFRAG Sustainability Reporting Technical Expert Group (SR TEG) also aims to expand as EFRAG called for candidates focused on consumer expertise. 

On another note, EFRAG opened a tender to outsource the development of the XBRL taxonomy on the first set of ESRS. 

NGOs and Trade Union’s letter to Commissioner McGuinness on ESRS

NGOs and Trade Unions urge the EC to uphold the legal mandate agreed upon in the CSRD and not give in to the political pressure to hinder EU progress in the finalisation of the ESRS.  
The 37 signatories oppose the prioritisation of certain sustainability matters over others, warn against the excessive reduction of disclosure requirements and support international alignment, but not by lowering the EU’s sustainability ambitions. 

ECON Committee update on the EU green bond final negotiations  

The European Parliament (EP) Economic and Monetary Affairs (ECON) Committee Chair updated ECON members on the outcome of the second trilogue on the EU green bonds proposal held on October 18. The co-legislators discussed the following: 

  • civil liability 
  • green securitisation 
  • use of proceeds requirements 
  • disclosure requirements and consistency with other sustainable finance legislation 

The co-legislators also agreed on provisions related to external reviewers and the taxonomy alignment. They mandated further work to the technical level and the EC. 

EP and Council prepare for the UN COP27  

The EP Environment, Public Health and Food Safety (ENVI) Committee has adopted a resolution outlining its demands for the UN COP 27 Climate Change Conference. MEPs urge G20 to increase their 2030 climate targets to limit global warming and to align with the Paris Agreement. The ENVI Committee also considered Ukraine’s invasion a threat that could delay set targets. 

The Council shared their position for the UN Climate Summit. The EU environment ministers committed to updating its climate goals given the current geopolitical situation. Member States highlighted the need to support climate finance more ambitiously and push EU climate legislation forward. 

The Council adopted its conclusions on climate finance. The focus is on the following: 

  • more institutional and governmental efforts to attract public and private climate action-related investments 
  • energy transition and phasing-out of fossil fuels

ESMA’s 2023 Working Programme and Strategy for 2023-2028

The European Securities and Markets Authority (ESMA) sets out priority work areas for 2023. ESMA plans on delivering on the sustainable finance roadmap priorities. To mention a few of ESMA’s expected output: opinion on the ESRS, technical standards under the EU Green Bonds Regulation, and the regulatory work required under the Sustainable Finance Disclosure Regulation.  

The ongoing strategy considers the EU’s key priorities in financial services, highlighting sustainable finance as one of the main areas of action. ESMA will support the transition to a more sustainable financial system while enhancing its assessments of ESG-related trends, risks and vulnerabilities that can impact financial markets. 

ESAs propose disclosures for fossil, gas and nuclear energy investments

The European Banking Authority (EBA), the European Insurance and Occupational Pensions Authority (EIOPA) and ESMA delivered to the EC their final report with draft Regulatory Technical Standards (RTS). The European Supervisory Authorities (ESAs) propose to add specific disclosures to ensure transparency on investments in taxonomy-aligned gas and nuclear economic activities. 

The EC will scrutinise the draft RTS and endorse them within three months of publication. 

Read more 

EU Platform on Sustainable Finance issues two reports to the EC

The first report sets out the Platform’s recommendations to the EC on data usability. It contains a detailed overview of the first implementation phase of the Taxonomy. The report also includes specific recommendations to improve the usability and coherence of the Taxonomy. 

The second report provides essential insights into applying minimum safeguards as set out in the Taxonomy Regulation Art 18. It provides advice on assessing compliance with the requirement to implement minimum safeguards in line with the Taxonomy Regulation. 

Also, see webinars to launch the reports.   

Call for applications for the EU Platform on Sustainable Finance

The EC launched a call for applications for selecting the Platform on Sustainable Finance members for the new mandate from Q1 2023 to Q4 2024. The current mandate ends in October 2022. Applicants can submit their application by 9 November 2022. 

CS3D: NGOs call on EU legislators to close regulatory gaps in the financial sector 

ShareAction and other stakeholders published a joint statement on the Role of Financial Institutions in the Corporate Sustainability Due Diligence Directive (CS3D). They call on the EU co-legislators to address shortcomings and close regulatory gaps in the financial sector. This will help ensure meaningful due diligence obligations for financial institutions in line with international frameworks. 

ISSB continues work on sustainability reporting standards

The International Sustainability Standards Board (ISSB) met to discuss the preliminary feedback received on its first two drafts of IFRS sustainability reporting standards. The ISSB voted unanimously to require disclosures on Scope 1, Scope 2 and Scope 3 greenhouse gas (GHG) emissions. The ISSB will develop ‘relief’ provisions for Scope 3 to help companies apply Scope 3 requirements. 

The ISSB also decided to consult on its agenda-setting in the first half of 2023. 

The G7 Finance Ministers and Central Bank Governors issued a statement welcoming the ISSB’s work on developing a global baseline of sustainability disclosures to inform investment decisions. So did the G20 Finance Ministers and Central Bank Governors pointing out the need to achieve interoperability across disclosure frameworks. This 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.