23:12 minutes listen
In this episode of KPMG Expert Talk, Saskia Slomp, EFRAG CEO, discusses with our experts Prof. Dr. Reto Eberle and Silvan Jurt the current state of European developments in the area of sustainability reporting.
The Green Deal
As part of the Green Deal, the EU is developing its own sustainability reporting standards.
- What do we know to date about the content of this new kind of reporting?
- Which organizations are concerned?
Insights and takeaways
- The EU is currently drafting its own rules on sustainability reporting (Corporate Sustainability Reporting Directive/CSRD). Under the proposed CSRD, the European Financial Reporting Advisory Group (EFRAG) develops draft standards, using proper due process, public oversight and transparency, and with the expertise of relevant stakeholders.
- Due to its ambitious timeline, the EU is thus playing a pioneering role. However, it explicitly strives "to build on and contribute to international convergence".
- By contrast with the existing duty regarding non-financial reporting (Non-Financial Reporting Directive/NFRD), all large organizations are now concerned by the new rules.
- For these large organizations, a standard should already be issued in the second half of 2022; it would apply for the first time to reports published in 2024, covering FY2023.
- Listed SMEs will also be concerned, but at a later date (presumably in FY2026).
- It is intended that the sustainability report will have to be examined by an independent body.
EFRAG's approach to sustainability reporting is not about re-inventing the wheel, it is really about taking into account and building upon existing global sustainability reporting initiatives.