The European Financial Reporting Advisory Group (EFRAG) unveils its proposal for a revision of the European Sustainability Reporting Standards (ESRS) today. The European Commission had commissioned the revision since the initial framework failed to achieve the objective of user-oriented and effective regulation. In addition to more than 1,100 data points to be reviewed, the lack of compatibility with international standards had been a particular source of criticism.

“The hoped-for and necessary breakthrough has not fully materialised. The proposed adjustments fall short of what companies and investors need in key areas. Instead of focussing to provide clarity on how information can be presented fairly and clearly to financial stakeholders, new data points and concepts have been added. Rather than reducing complexity and creating compatibility with international standards, new uncertainty is being created,” says Henriette Peucker, Chief Executive and Member of the Board of Deutsches Aktieninstitut.

Deficits had already become apparent at several levels during the ongoing process, and these have had an impact on the proposals now presented. With regard to the next steps, Deutsches Aktieninstitut calls on the European Commission

• To provide EFRAG with a clear mandate that defines expectations also in terms of results and industry participation.
• To remedy deficiencies in the EFRAG governance structure, which were evident, among other things, in the chaotic voting procedure on the proposals that have now been put forward.
• To develop EFRAG into a standard-setter that is primarily oriented towards the interests of reporting companies.
• To consider financial aspects separately from their impact on society or the environment.
• To create new structures and processes for new standards in sustainability reporting now.

Peucker: “We appreciate the European Commission’s announcement that it will consult again on the proposals for revising the ESRS standards, giving the business community at large an opportunity to constructively propose improvements. In order to achieve the important goal of clear and manageable sustainability reporting, we call on the European Commission to revise the standards accordingly.”

The European Financial Reporting Advisory Group (EFRAG) unveils its proposal for a revision of the European Sustainability Reporting Standards (ESRS) today. The European Commission had commissioned the revision since the initial framework failed to achieve the objective of user-oriented and effective regulation. In addition to more than 1,100 data points to be reviewed, the lack of compatibility with international standards had been a particular source of criticism.

“The hoped-for and necessary breakthrough has not fully materialised. The proposed adjustments fall short of what companies and investors need in key areas. Instead of focussing to provide clarity on how information can be presented fairly and clearly to financial stakeholders, new data points and concepts have been added. Rather than reducing complexity and creating compatibility with international standards, new uncertainty is being created,” says Henriette Peucker, Chief Executive and Member of the Board of Deutsches Aktieninstitut.

Deficits had already become apparent at several levels during the ongoing process, and these have had an impact on the proposals now presented. With regard to the next steps, Deutsches Aktieninstitut calls on the European Commission

• To provide EFRAG with a clear mandate that defines expectations also in terms of results and industry participation.
• To remedy deficiencies in the EFRAG governance structure, which were evident, among other things, in the chaotic voting procedure on the proposals that have now been put forward.
• To develop EFRAG into a standard-setter that is primarily oriented towards the interests of reporting companies.
• To consider financial aspects separately from their impact on society or the environment.
• To create new structures and processes for new standards in sustainability reporting now.

Peucker: “We appreciate the European Commission’s announcement that it will consult again on the proposals for revising the ESRS standards, giving the business community at large an opportunity to constructively propose improvements. In order to achieve the important goal of clear and manageable sustainability reporting, we call on the European Commission to revise the standards accordingly.”

The European Financial Reporting Advisory Group (EFRAG) unveils its proposal for a revision of the European Sustainability Reporting Standards (ESRS) today. The European Commission had commissioned the revision since the initial framework failed to achieve the objective of user-oriented and effective regulation. In addition to more than 1,100 data points to be reviewed, the lack of compatibility with international standards had been a particular source of criticism.

“The hoped-for and necessary breakthrough has not fully materialised. The proposed adjustments fall short of what companies and investors need in key areas. Instead of focussing to provide clarity on how information can be presented fairly and clearly to financial stakeholders, new data points and concepts have been added. Rather than reducing complexity and creating compatibility with international standards, new uncertainty is being created,” says Henriette Peucker, Chief Executive and Member of the Board of Deutsches Aktieninstitut.

Deficits had already become apparent at several levels during the ongoing process, and these have had an impact on the proposals now presented. With regard to the next steps, Deutsches Aktieninstitut calls on the European Commission

• To provide EFRAG with a clear mandate that defines expectations also in terms of results and industry participation.
• To remedy deficiencies in the EFRAG governance structure, which were evident, among other things, in the chaotic voting procedure on the proposals that have now been put forward.
• To develop EFRAG into a standard-setter that is primarily oriented towards the interests of reporting companies.
• To consider financial aspects separately from their impact on society or the environment.
• To create new structures and processes for new standards in sustainability reporting now.

Peucker: “We appreciate the European Commission’s announcement that it will consult again on the proposals for revising the ESRS standards, giving the business community at large an opportunity to constructively propose improvements. In order to achieve the important goal of clear and manageable sustainability reporting, we call on the European Commission to revise the standards accordingly.”