Mairead McGinness, commissioner for financial services, financial stability and Capital Markets Union, has publicly called on the European Financial Reporting Advisory Group (EFRAG) to prioritise its efforts on capacity building for the implementation of the first set of EU Sustainability Reporting Standards (ESRS) over the preparatory work for the draft sector-specific standards.
This also avoids overlapping consultations and eases the burden on all stakeholders wanting to contribute to the sustainability agenda.
EFRAG is adjusting its workplan to this new priority whilst carrying on under a modified timetable work on sector-specific standards and standards for SMEs, the group said.
Under the Corporate Sustainability Reporting Directive (CSRD), EFRAG is appointed technical adviser to the European Commission developing draft ESRS.
EFRAG delivered the first set of draft ESRS to the Commission covering the sector-agnostic standards in November 2022 prepared under its due process.
Following McGuinness message, EFRAG fully recognises the need to translate a legal and regulatory framework into a real operational success and does not underestimate the significant potential challenges that are faced by all stakeholders, the group stated.
As a consequence, EFRAG is discussing how to put in place, with a high priority, an ESRS implementation support function.
This could be organised under three pillars, dedicated to:
- the swift and timely provision of much-needed guidance;
- the creation of a user-friendly and comprehensive documentation hub; and
- the facilitation of educational initiatives.
“We are increasing the number of EFRAG staff, and allocating extra resources to these crucial tasks. EFRAG is also actively working on the digitalisation of the first set of ESRS,” it said.
EFRAG has already progressed on the first draft sector standards as well as on the draft standard for listed SMEs and on the draft sector classification standard. “EFRAG stands ready to adapt its agenda,” it added.
“EFRAG’s goal is to build on and contribute to the global progress of sustainability reporting. In this regard, the ongoing dialogue with the ISSB and the cooperation with GRI [Global Reporting Initiative] is particularly important,” EFRAG continued.
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