Eurosif response to revised ESRS consultation: key elements preserved but investor concerns remain

Eurosif responded the European Commission consultations on the draft delegated acts for the revised European Sustainability Reporting Standards (ESRS) and the voluntary standard.

Eurosif welcomes the European Commission’s draft, which stays broadly aligned with the recommendations issued by the standard-setter EFRAG.

• Preserving reporting on quantitative and qualitative anticipated financial effects is critical for investors to assess sustainability-related risks and opportunities, and to inform capital allocation decisions.
• Maintaining the double materiality assessment as a cornerstone of the framework, the “fair presentation” principle, and the ESRS structure is key for disclosures to remain complete, comparable, and decision-useful.
• The >60% reduction in data points proposed by EFRAG already delivers significant simplification, and we welcome the Commission’s decision not to introduce unnecessary additional cuts.

However, the drafts still raise significant concerns for responsible investors:

• Changes to key data points, including climate transition plans, GHG emissions, biodiversity, secondary microplastics, own workforce and human rights, risk reducing the availability and comparability of information.
• The absence of additional safeguards on the extensive reporting reliefs may turn them into common practice rather than exceptional measures, undermining the credibility of disclosures.
• Excluding assets managed on behalf of clients would create a blind spot in assessing the sustainability performance of financial institutions and increase fragmentation with international standards.
• A restrictive value chain cap (a provision limiting some information requests to smaller and medium-sized business partners) risks creating data gaps for investors. In the current draft, it does not cover all data points in the voluntary standard, which could also lead to implementation challenges for companies, and additional burdens for SMEs.

 

Make your voice heard: We call on investors and other users of sustainable information to also respond to the consultation, which closes on Wednesday, 3 June.

 

• Read Eurosif's response to the consultation on the revised ESRS here.
• Read Eurosif's response to the consultation on the voluntary standard here.