Exposure Drafts of European Sustainability Reporting Standards Released and Consultation Opened – Initial Takeaways

EFRAG has today published its revised and simplified Exposure Drafts of the European Sustainability Reporting Standards. There is also now a 60-day public consultation, open until September 29. More details are in this post.

Initial things to note from EFRAG’s announcement:

• The changes include streamlining the double materiality assessment, reducing overlaps across standards, clarifying language and structure and removing all voluntary disclosures. New relief mechanisms also have been introduced, such as exemptions where reporting would cause undue cost or effort.
• In total, mandatory datapoints have been cut by 57%, and the full set of disclosures – mandatory and voluntary – reduced by 68%.
• The overall length of the standards has been shortened by over 55%.

More specifically:

• The amendments simplify the double materiality assessment process and documentation for audit purposes. 
• There is improved flexibility on how to organize information, with more emphasis on how the reporting company manages its sustainability issues. 
• Overlaps between general disclosures and topical standards have been eliminated. Most granular narrative requirements in the topical standards have been deleted. 
• Voluntary disclosures have been eliminated, language clarified, various concepts simplified and text shortened. 
• New flexibilities and reliefs have been included, such as that information does not have to be reported if it requires undue cost or efforts. 
• Changes have been implemented to further enhance interoperability with other standards, in particular the IFRS Sustainability Disclosure Standards. 

In addition to the public consultation, EFRAG will organize or co-organize outreach events in September and October, gathering further feedback ahead of its final technical advice to the European Commission, due by November 30.

In parallel, EFRAG will perform a cost benefit analysis and targeted field tests, which are also open to participation from stakeholders.

The exposure drafts are available here.

The consultation is available here. 

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