Sustainable Finance: draft sustainability reporting standards for companies mark another step forward in the transition to a sustainable economy
The Commission welcomes the timely submission today of draft sustainability reporting standards from EFRAG (the body formerly known as the European Financial Reporting Advisory Group). Once adopted, these reporting standards will be used by companies subject to the Corporate Sustainability Reporting Directive (CSRD). Mandatory reporting standards will ensure that companies are fully transparent about their impact on people and the environment, as well as the risks they face from climate change and other sustainability issues.
Mairead McGuinness, Commissioner for Financial Services, Financial Stability and Capital Markets Union, said: “It is time to put sustainability reporting on an equal footing with financial reporting and that is exactly what we are doing here. Mandatory sustainability reporting standards will be an important tool to combat greenwashing. Standards will also help companies to communicate and manage their sustainability performance more efficiently.”
These standards will mark another step forward in the transition to a sustainable economy. The Commission will now consult EU bodies (such as the European Environment Agency and the European Central Bank) and Member States on the draft standards, before adopting the final standards by delegated acts in June 2023, followed by a scrutiny period by the European Parliament and Council. The reporting requirements will be phased in over time for different companies.
EFRAG is an independent, multi-stakeholder advisory body, majority funded by the EU. Its draft standards have been developed with the involvement of investors, companies, auditors, civil society, trade unions, academics and national standard-setters. Next year, EFRAG will develop proportionate standards for listed SMEs, as well as a first set of standards adapted to individual economic sectors.
