The European Securities and Markets Authority (ESMA), the EU’s securities markets regulator, has responded to the European Financial Reporting Advisory Group’s (EFRAG) public consultation on the first set of draft European Sustainability Reporting Standards (ESRS).
ESMA highlights its support for a strong materiality assessment but expresses its concern with the suggested ‘rebuttable presumption’ approach. ESMA also encourages EFRAG to keep engaging with the International Sustainability Standards Board to ensure further alignment of the ESRS and the IFRS Sustainability Standards to benefit both users of sustainability reporting and the companies that prepare the reporting.
In addition to the key points in its response to EFRAG, ESMA delivers a number of more technical remarks on the details of the draft standards.
The draft ESRS are a key element to achieve the Corporate Sustainability Reporting Directive’s (CSRD) ambition of ensuring sustainability reporting which is relevant, reliable, comparable and understandable.
EFRAG is expected to deliver its final draft ESRS to the European Commission in November 2022. In accordance with the CSRD, ESMA will deliver an opinion to the European Commission on this version of the ESRS. The two other European Supervisory Authorities, EBA and EIOPA, are also mandated to deliver opinions.