Joint recommendations from users of sustainability data on the European Commission’s revised ESRS and voluntary standard delegated acts
Together with the European Federation of Financial Analysts Societies (EFFAS), the Institutional Investors Group on Climate Change (IIGCC), the Principles for Responsible Investment (PRI) and PensioenFederatie, the Dutch Federation of Pension Funds, Eurosif has published a joint statement on the draft European Sustainability Reporting Standards (ESRS) and voluntary standard delegated acts.
We call on the European Commission, which will adopt delegated acts in the coming weeks, to ensure sustainability reporting standards remain credible and useable.
We welcome that the revised draft ESRS preserves several essential elements for investors. However, key gaps must be addressed to ensure decision‑useful and comparable disclosures during the simplification process.
Our main recommendations:
- Preserve disclosures on quantitative and qualitative anticipated financial effects.
Quantitative and qualitative disclosures on anticipated financial effects are central to credible, decision-useful sustainability reporting. They are essential to show how sustainability-related risks and opportunities may affect future financial performance, link sustainability information with financial statements, support financial materiality assessments and inform capital allocation decisions.
- Retain double materiality and the fair presentation principle.
Double materiality must remain at the core of the ESRS framework, with financial and impact materiality treated on equal footing. The fair presentation principle is equally important to ensure that sustainability statements remain faithful, balanced and decision-useful.
- Maintain the ESRS structure and avoid further cuts to data points.
The current draft already delivers very substantial simplification, with more than 60% of the initial ESRS data points removed. Any further cuts would weaken information that investors and other users need to assess risks, opportunities and transition preparedness. We also welcome improved interoperability with other reporting frameworks on key areas. The overall ESRS structure should also be preserved to ensure coherence and comparability.
- Address remaining concerns for users – noting individual signatories to thisstatement have also raised additional specific issues.
- Problematic changes to some data points: some of the proposed adjustments risk reducing the reliability and comparability of sustainability reports, and create further divergence with international standards.
- Over-extensive phase-ins and reliefs without safeguards: extensive reliefs, including those based on “undue cost or effort” remain too broad and lack sufficient safeguards.
- A value chain cap restricting information availability: the draft voluntary standard delegated act retains only a subset of its data points under the value chain cap, likely reducing the availability, comparability and decision-usefulness of information for users.
Read the statement here.
