ThinkTWENTY20

Yet another development in the ongoing saga of change in the field of ESG Reporting is the  public consultation paper on ‘Due Process Procedures for EU Sustainability Reporting Standard-S​etting,’released by the European Financial Reporting Advisory Group (EFRAG). The group is seeking input by 15 September 2021.

As the paper states, “a robust yet agile and adaptable due process is necessary to meet urgent standard-setting needs within a rapidly moving landscape.” The proposals cover principles, oversight and agenda setting, as well as substantial detail on the process of standards setting itself. They affirm that it will be digital from the outset, noting that companies will need to tag reported data according to a “digital categorisation system” to be developed together with the sustainability reporting standards. Likely, this will be based on XBRL. Promisingly, it specifies that the digital implications are to be considered when developing and drafting new or amended standards.

The adoption of shared European sustainability reporting standards is part of the EU’s proposed Corporate Sustainability Reporting Directive (CSRD), and as such EFRAG has been invited to start interim work on drafting these standards, even prior to the relevant legislation being finalised. See also www.xbrl.org for further details.