Consistency and coherence with existing EU acquis and the development of the EU Sustainable Finance framework must be ensured.
• The timeline for adopting this Directive and the further development of an EU reporting standard must consider the ongoing legislative processes in the context of the EU Sustainable finance framework.
• The CSRD should strive for a level playing field. As such, we agree with the need for an adequate scope, including, in this case, listed and non-listed companies.
• Content-wise, reporting requirements should not lead to disproportionate obligations for companies, particularly if the level of detail does not create added value for data users.
• We encourage applying a phase-in approach together with a comply-or-explain procedure for data where it can be justified not to follow setup in full.
• In terms of publication, companies should benefit from several options: it should be mandatory to publish financial and non-financial documents jointly and with the same digital method, leaving companies the possibility of publishing the sustainability report separately.
• Format-wise, implementing a single reporting platform should only occur after the full establishment of the necessary prerequisites and still make room for some flexibility in choice of publication as it allows companies to better reflect their path towards a sustainable agenda.
• We support the simplification of the reporting process at parent company level for subsidiary companies.
• Overall, we support the development of EU Reporting Standards. Nevertheless, the following elements should be considered:
o The development and implementation of such a standard should be pragmatic and realistic. The timeline should fit ongoing EU sustainable finance legislative activity and process, ensuring that relevant stakeholders’ perspectives are considered. o It is crucial to consider alignment and coherence with existing global standards largely used by companies. o It is crucial to keep in mind the ongoing development of the EU Taxonomy framework and the interlinkages between such framework and the CSRD. o Electronic reporting format should be implemented subsequently to the definition of the content requirements. It is key to outline the content first and then set up a standardised format.
• We welcome a mandatory but simplified reporting standard for SMEs. As such, implementation and compliance processes should also be facilitated for SMEs.
• An ‘equivalence principle’ should apply when assessing non-EU activities being reported according to EU publication requirements. An EU company must rely on non-EU activity to be seen as sustainable – e.g. a US wind park. Vice versa, third-country companies must rely on EU activities to be seen as sustainable by the EU according to their national reporting standards - if the activity is subject to equivalent rules.
• We welcome clarification on the principle of materiality. Nevertheless, some challenges could arise during implementation due to increasing EU sustainable finance obligations. Particularly, w.r.t. adapting to climate risks, it is important to avoid a disproportionate level of scenarios to be assessed and mitigated.
• We support the proposed third-party assurance to ensure a level playing field for companies and improve the quality and disclosure of information. We also support reasonable assurance. However, it has taken time and resources to develop the necessary internal controls, data quality etc. for financial data. Mature handling of ESG data will take time to develop too. Thus, a phasing-in period is required to allow new requirements for reporting and assurance practices for sustainability information to reach a higher degree of maturity. Moreover, the assurance level should be reviewed after one or two reporting cycles based on global or EU standards.
• Information on intangibles is a particularly sensitive issue. Although intangibles play an increasingly significant role in modern business, it is difficult to identify and measure them. Thus, at this stage, regulating the issue of intangibles is premature. At best, regulation of intangibles should be considered in the coming years to allow companies time to explore the topic.