EFRAG | The sector-specific standards will be delayed upon request from the European Commission
INSIGHT by EFRAG
© Donald Wu
Commissioner McGuinness has publicly called on EFRAG to prioritise its efforts on capacity building for the implementation of the first set of ESRS over the preparatory work for the draft sector-specific standards. This also avoids overlapping consultations and eases the burden on all stakeholders wanting to contribute to the sustainability agenda. EFRAG is adjusting its workplan to this new priority whilst carrying on under a modified timetable work on sector-specific standards and standards for SMEs. Under the CSRD, EFRAG is appointed technical adviser to the European Commission developing draft ESRS.
EFRAG delivered the first set of draft ESRS to the European Commission covering the sector-agnostic standards in November 2022 prepared under its due process. Following Commissioner McGuinness message, EFRAG fully recognises the need to translate a legal and regulatory framework into a real operational success and does not underestimate the significant potential challenges that are faced by all stakeholders. As a consequence, EFRAG is discussing how to put in place, with a high priority, an ESRS implementation support function. This could be organised under three pillars, dedicated to
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(i) the swift and timely provision of much-needed guidance,
(ii) the creation of a user-friendly and comprehensive documentation hub, and
(iii) the facilitation of educational initiatives.
We are increasing the numberof EFRAG staff, and allocating extra resources to these crucial tasks. EFRAG is also actively working on the digitalisation of the first set of ESRS.The following sets of draft ESRS, dedicated to SMEs and sector-specific standards, remain on EFRAG's agenda as a key task while being cognisant of the need to avoid overlapping public consultations and to prioritise implementation support. EFRAG has already progressed on the first draft sector standards as well as on the draft standard for listed SMEs and on the draft sector classification standard. EFRAG stands ready to adapt its agenda.EFRAG's goal is to build on and contribute to the global progress of sustainability reporting. In this regard, the ongoing dialogue with the ISSB and the cooperation with GRI is particularly important. The two-way dialogue between the parties is intense and progress is significant. EFRAG is hopeful that interoperability will be achieved and, as a consequence, EU companies applying the first set of ESRS will not be confronted with multiple reporting requirements.