The European Parliament’s (EP) Legal Affairs (JURI) Committee adopted its final position on the Corporate Sustainability Due Diligence Directive (CSDDD) on 25 April with 19 votes in favour, 3 votes against and 3 abstentions. Key points in JURI’s position:
As a next step, the EP is expected to vote on its mandate on 1 June. The negotiations with the Council will follow.
Accountancy Europe published a statement welcoming the adoption of JURI’s position and setting the tone for the trilogue negotiation.
The EC issued a new set of EU Taxonomy criteria for economic activities that contributes to one or more of the following environmental objectives:
The EC is looking to set a 2040 target for EU Greenhouse Gas (GHG) reductions to ensure the path towards climate neutrality by 2050. For this purpose, the EC launched a call for evidence. Stakeholders can provide feedback by 23 June 2023.
EFRAG established the EFRAG ESRS Digital Reporting Consultative Forum, which will discuss digital reporting aspects of sustainability reporting, including the ESRS XBRL taxonomy.
In addition, EFRAG aligned its Due Process Procedures for Sustainability Reporting Standard Setting with the CSRD final text following its publication in the EU Official Journal.
The recent Global Reporting Initiative (GRI) analysis examines the current state-of-play on due diligence and explores the connection between due diligence and sustainability reporting. The paper calls for harmonisation of due diligence policies globally due to their cross-border implications.
The European Ombudsman launched an inquiry into the EC’s Regulatory Scrutiny Board (the Board) following a Corporate Europe Observatory (CEO) complaint. CEO raised concerns that interactions between the Board members and interest representatives may have influenced its work on the draft CSDDD.
The European Securities and Markets Authority (ESMA) assessed how issuers comply with specific requirements, including non-financial reporting obligations. 403 issuers were examined to assess compliance with articles 19a and 29a of the Accounting Directive.
The European Supervisory Authorities (ESAs) opened a public consultation on changes to the Sustainable Finance Disclosure Regulation (SFDR) DA. This is to address issues that have emerged since the SFRD was introduced.
Stakeholders can submit comments by 4 July 2023.
The International Auditing and Assurance Standards Board (IAASB) confirmed its intention to advance the consultation on a new sustainability assurance standard International Standard on Sustainability Assurance (ISSA) 5000. IAASB hopes to gain broad and early input on the draft ISSA 5000 and have the final standard ready in 2024.
The ISSA 5000 Exposure Draft is subject to the IAASB’s approval this June. The consultation is expected to open end of July/early August 2023.
The International Organization of Securities Commissions (IOSCO) welcomed the IAASB initiative to advance the consultation on sustainability assurance standard ISSA 5000.
IOSCO issued a report outlining key considerations for an effective global assurance framework on sustainability reporting. In the report, IOSCO:
IOSCO confirmed it will work on sustainability reporting but also on sustainability assurance standards, including:
The International Accounting Standards Board (IASB) initiated a project to explore whether and how companies can provide better information about climate-related risks in their financial statements. The outcome could be minor amendments to the existing IFRS accounting standards, new application guidance, new examples, or further educational materials. However, the project will not result in a new IFRS accounting standard.
Andreas Barckow, IASB Chair, explained that the project illustrates connection between the work of the IASB and the International Sustainability Standards Board (ISSB).
The ISSB added a transitional relief enabling companies to ensure they meet investor information needs. This will apply to climate change in the first reporting year using the ISSB Standards.
In the second year of the ISSB standards application, companies will need to provide reporting beyond climate, including other sustainability topics.
The Taskforce on Nature-related Financial Disclosures (TNFD) issued its prototype (Beta Release) framework. The framework prototype includes:
The prototype is open for public testing and feedback. TNFD framework will be published in September 2023 for market adoption.
The ISSB will ask for feedback on its agenda priorities, specifically on four identified potential projects:
Stakeholders can expect a consultation in May with a comment period of 120 days. The ISSB will also open a 90-day consultation on its proposed methodology for revising the SASB Standards to improve their international applicability.
The UK Endorsement Board (UKEB) launched its National Standard Setters Sustainability Forum in April. Its members come from the UK, Australia, Malaysia, and Canada. The UKEB also established its Sustainability Working Group, which will advise the Secretariat on the connectivity of IFRS accounting and IFRS sustainability standards.This curated content was brought to you by Vita Ramanauskaité, Accountancy Europe Manager, Head of Sustainability, since 2015. You can send her tips by email, follow her on Twitter and connect with her on LinkedIn.