Cautious Welcome for European Sustainable Reporting Standards

Trade body Eurosif and US$1 trillion sovereign wealth fund Norges Bank Investment Management (NBIM) have published their reactions to the European Financial Reporting Advisory Group’s (EFRAG) consultation on their European Sustainability Reporting Standards (ESRS). Eurosif, which represents investors and finance sector firms, was positive in its response, congratulating EFRAG on its development of an “ambitious and comprehensive” reporting framework based on “double materiality and encompassing the full spectrum of ESG”. NBIM was less positive overall, however. While the fund welcomed EFRAG’s “level of ambition” and the range of issues included in the ESRSs, NBIM suggested the draft standards need to be “further amended and simplified” for them to be “operationally practical” for reporting companies. The firm said EFRAG could further “prioritise and reduce” the number of disclosure metrics in its standards and focus on key information that is likely to be valuable for users. NBIM also proposed EFRAG could also modify some of its metrics to “ensure greater harmonisation of standards”. EFRAG’s ESRS consultation period closed on Monday 8 August and its final standards, to be used in the Corporate Sustainability Reporting Directive, are expected to be presented to the European Commission for approval in November.  

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