JURI Committee hearing on the CSRD final negotiations
On 25 April, the European Parliament’s (EP) Legal Affairs (JURI) Committee held a hearing to report back on the ongoing CSRD trilogues. The second political trilogue meeting took place in the morning of the same day.
MEP rapporteur Pascal Durand (Renew Europe, France) confirmed that all parties show a strong will to advance in the negotiations and the French Presidency is keen to finalise the CSRD text before the end of their mandate. He noted the following points as the most challenging:
- SMEs – the Council and the EC don’t seem to agree with the EP’s position on excluding listed SMEs from the scope; this point is still being debated
- extra-territoriality – if non-EU companies operating in the EU single market are not in the scope, then EU companies will be at a disadvantage; progress seems to have been made on this point
- reporting on consolidated or subsidiary level – the Council’s position is requiring reporting at the top but nothing at the bottom; the discussion is still ongoing
- assurance – the EC would come back with a new proposal on whether assurance on sustainability information can be done by the same statutory auditor as for financial statements
It has been previously indicated that the last political trilogue would take place on 19 May, but it seems that this has been pushed to 30 May as the negotiations are taking longer. In the meantime, technical meetings take place.
ECON vote on green bond proposal delayed
The EP Economic Affairs (ECON) Committee was expected to vote on its position on 28 April, but it was postponed for the second time. It seems there are difficulties in finding a compromise on transitional plans and there are concerns about including nuclear energy within the EU Taxonomy. The Council has finalised its position and is ready to enter final negotiations.
Accountancy Europe’s letter on European sustainability reporting standards
Accountancy Europe’s letter to Commissioner McGuinness calls for the development of purposeful and effective European sustainability reporting standards (ESRS).
Similar letters were sent to the EC and/or EFRASG from the American Chamber of Commerce to the European Union and other non-EU organisations, the French association of large companies (AFEP) and Deutsches Aktieninstitut, the Dutch Accounting Standards Board, and other stakeholders.
EFRAG appoints its Sustainability Reporting Technical Expert Group
The new European Financial Reporting Advisory Group (EFRAG)Sustainability Reporting Technical Expert Group (SR TEG) will provide technical advice to the EFRAG Sustainability Reporting Board on the draft European sustainability reporting standards. The SR TEG will also be responsible for the development of sustainability standards and, along with the Financial Reporting TEG, ensure connectivity between financial reporting and sustainability reporting.
EFRAG issues Exposure Drafts on ESRS
EFRAG issued 13 Exposure Drafts on European Sustainability Reporting Standards (ESRS). The public consultation aims at receiving feedback on three key aspects of the Exposure Drafts:
- the relevance of the proposed architecture, the implementation of the CSRD principles and the overall content of each ED
- the possible options for prioritising/phasing-in the implementation of the ESRS
- the adequacy of each disclosure requirement mandated by each ED
The consultation survey is organised in three different sections:
Whilst the consultations are issued in the name of the EFRAG PTF-ESRS, it will be the EFRAG SR TEG and SRB which will analyse the feedback received and finalise the Technical Advice to the EC.
The public consultation period will be open until 8 August 2022.
EC believes the future legislative proposal to ban forced labour products should apply to SMEs
On 25 April, the EP Committee on International Trade (INTA) discussed with experts and the EC the forthcoming legislative proposal to ban forced labour products from the market.
The EC stance is that SMEs should not be excluded from the scope of the future legislative instrument. However, the legislative tool will need to be proportionate and not cause administrative burden. The EC plans to publish its proposal in September 2022.