New arrivals for sustainability and businesses. L'Ephrag (European Financial Reporting Advisory Group) has in fact approved 12 new standards on sustainability reporting (ESRS). The new standards have been examined by the OIC, the Italian Accounting Organization (OIC), which has taken note of the new arrivals. Now the drafts of the 12 standards agreed upon by Sustainability reporting board they will be sent to the European Commission which has the task of approving them and incorporating them into Community legislation. From then on, the new transparency obligations envisaged by the new European directive on sustainability reporting. The issue is certainly important for companies that will have to apply the new standards and that will go from about 400 to 40.000 continental European companies, but it is also important for investors who will have more homogeneous criteria for comparing the performances declared by companies and for consumers. savers who will be able to make more informed purchases.
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Sustainability and businesses: OIC takes note of the new 12 Efrag standards, the word to the EU Commission
The new standards, informs an OIC press release, were arrived at after a process that envisaged a public consultation, about 750 responses presented and significant changes: we are moving in the direction of greater simplification and reduction of disclosure obligations by incorporating the requests made by the OIC in several points. “In particular – explains a press release from the organization – the reference to the rebuttable presumption. That is, the obligation, not always easily fulfilled, to explain the reasons why a company does not consider it relevant for its business to satisfy a specific request included in the EFRAG information set”. The final text approved by the European body states that a set of essential information will be compulsorily included in the sustainability reports. Disclosure of other information, also contained in the standards, will instead be subject to the company's materiality assessment. The latter will have to establish whether or not that information is relevant on the impact of sustainability or in relation to financial materiality.
Efrag, to facilitate greater comparability of the sustainability reports of European companies with those of non-EU companies that will adopt the standards drawn up by IFRS Foundation, has decided to adopt the same definition of the value chain. Finally, the times for applying the new rules have been softened. For the first three years, companies will not be able to provide information on the value chain, if not available. Finally, with reference to environmental standards, with the exception of the climate, it has been established that for the first three years companies will be able to provide only qualitative information on the potential financial effects.
Sustainability reporting standards endorsed by Efrag
- 2 Standard cross cutting addressing general principles and transversal issues such as: company strategy and business model, sustainability governance, material ESG impacts, risks and opportunities, assessment of the materiality process by companies, policies, targets, action plans and resources;
- 5 Environmental standards addressing the following topics: climate change, pollution, water and marine resources, biodiversity and ecosystems, resource use and circular economy;
- 4 social standards addressing the following topics: own workforce, workers along the value chain, impacted communities, consumers and end-users;
- 1 Governance standards that address governance issues in relation to sustainability
Green bonds are also under scrutiny
Oic has also decided to launch a specific project relating to green bonds to respond to the various requests for clarification received on financial instruments that are spreading considerably throughout the world with an outstanding amount, globally, past from 193 to 1.850 billion euros between the beginning of 2015 and the first quarter of 2021.
