FERMA makes this comment in its response submitted today to a public consultation run by the European Financial Reporting Advisory Group (EFRAG). EFRAG is drafting these new standards to be introduced with the European Union’s Corporate Sustainability Reporting Directive (CSRD).

Read FERMA’s full response to the EFRAG consultation at the following links:

• Part 1, or ‘EFRAG Sustainability Reporting Board Consultation Survey 1A – 1C, 2’ link here
• Part 2, or ‘EFRAG Sustainability Reporting Board Consultation Surveys 3A – 3D’, which contains FERMA’s views on standard G1-7 on risk management link here

The CSRD, which was adopted in June 2022 by the EU, will come into law on 1 January 2024. Companies that currently fall within the scope of the Non-Financial Reporting Directive will have to report according to these new standards in their accounts for 2023. It will extend to other companies over the next four years.

“FERMA takes the view that the draft standards take a reasonable approach to the large and complex task of setting EU Sustainability Reporting Standards. We also support the prominence given to risk management in the draft standards, which reflect well the vital contribution it makes to helping organisations manage their sustainability risks and opportunities, as well as execute their strategy on sustainability,” said Typhaine Beaupérin, CEO of FERMA.

In its response to the consultation, FERMA also suggests there may be benefits to a gradual implementation of the standards as additional companies come under the scope of CSRD. This could especially help companies that did not previously have to perform sustainability reporting.

Further points:

Storage and access

FERMA also looks forward to more details from EFRAG and the European Commission on how the sustainability information they report will be digitally stored and easily accessed.

Double materiality

FERMA welcomes the concept of including financial and impact materiality or “double materiality” in sustainability reporting. However, it urges EFRAG to clarify what criteria companies must use to determine what is material to their business from the two perspectives.

Reporting templates

FERMA argues that reporting templates could assist some companies in complying with the standards, provided the templates maintain an appropriate level of flexibility and are not overly prescriptive.

Consistency in reporting

FERMA calls for consistency between the European Sustainability Reporting Standards, other relevant EU reporting requirements and international standards, such as those being developed by the International Sustainability Standards Board (ISSB). This consistency in requirements will be especially important for multinational companies.

FERMA will run a Sustainability Masterclass at the FERMA Forum in Copenhagen on Tuesday 11 October, which will feature the CSRD and the proposal for a Corporate Sustainability Due Diligence Directive.

Contact us:

• For content: charles.low@ferma.eu
• For media: Typhaine.beauperin@ferma.eu