- The existing sustainability reporting requirements should be simplified, not complicated with additional regulation.
- European financial institutions have issued a joint letter urging the European Commission to provide the European Financial Reporting Advisory Group (EFRAG) with a clear mandate on the matter.
- EFRAG’s mission is to serve the European public interest in both financial and sustainability reporting by drafting standards and promoting European views in the field of corporate reporting.
- The joint letter is signed by Insurance Europe, the European Fund and Asset Management Association (EFAMA), the European Savings and Retail Banks Group (ESBG) and the European Banking Federation (EBF).
European financial sector institutions have issued a joint letter to express their concern in relation to the current direction of the European Financial Reporting Advisory Group EFRAG’s work on sector-specific standards. According to the undersigned, EFRAG’s work is currently focused on developing new sector-specific disclosure requirements instead of streamlining the existing sector-agnostic requirements and supporting companies in their application. The institutions call on the Commission to provide EFRAG with a clear mandate to shift the focus of its current work.
“At this point, it would be wise to take a brief respite from the reporting framework. This does not mean we want to compromise on the overall objectives for sustainability”, says Legal Adviser Aleksi Kaakinen from Finance Finland.
According to Kaakinen, it is important to first assess companies’ implementation of existing sector-agnostic requirements before deciding on the introduction of sector-specific standards. The European Sustainability Reporting Standards (ESRS) lay out the rules concerning the environmental, social and governance information that companies have to report.
Kaakinen says the sector needs guidance on technical and practical implementation issues, especially regarding value chains and materiality analysis.
“The uniformity of different companies’ reporting should also be evaluated. There is a risk that the new reporting requirements will only further complicate the interpretation of the basic reports published next year”, Kaakinen points out.
In their letter to the Commission, the financial sector umbrella organisations call for a more practical approach to EFRAG’s operations, emphasising the relevance, usefulness and consistency of requirements. Kaakinen agrees with the importance of prioritisation.
“Next year’s reporting should concentrate on the activities with the highest environmental and social impacts. Measures should be focused on the areas in which reporting is the most challenging”, Kaakinen says.
Finance Finland is a member of Insurance Europe, the European Fund and Asset Management Association (EFAMA) and the European Banking Federation (EBF).
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