ESRS Taxonomy Outreach
At an Outreach event on the EFRAG Sustainability Reporting Standards (ESRS) taxonomy held on Wednesday, key EFRAG personnel provided a range of details about the ESRS taxonomy that is currently out for consultation. ESRB Chair Patrick de Cambourg, EFRAG TEG Chair Chiara Del Prete, EFRAG Taxonomy lead Richard Boessen and Project Manager Andrea Giannini all provided a wealth of detail about the taxonomy, the legal framework that it operates within and background to a range of taxonomy design questions.
A panel comprising Chiara Del Prete, Richard Boessen, Stefan Schnell (BASF SVP and EFRAG SRB Member), Marc Houllier, (Co-Founder of Corporatings) and John Turner (CEO, XBRL International) discussed a number of aspects of the taxonomy and answered questions.
There remains significant interest in various aspects of the ESRS taxonomy. There is a greater emphasis in the standards on links between different parts of sustainability disclosures. For example, the ESRSs emphasise linking certain targets with policies that seek to achieve those targets, or metrics that measure progress towards their achievement. The taxonomy reflects this. There are also some “shortcuts”, like the selection of categories and the use of true/false booleans that make these large disclosures easier to navigate and to use in screening or filtering mechanisms by a variety of different users. It’s worth noting that similar features are used in new versions of the IFRS taxonomies and the US GAAP taxonomies. Disclosure standards – and their digital models — continue to evolve.
The final EFRAG taxonomy is expected mid year, but the process does not end there. ESMA, the European Securities Markets Authority will need to review the taxonomy and prepare an RTS as part of its rule making function. Given the time associated with due process and translation, we don’t expect that this will be finalised before the middle of next year. It’s for this reason that it is extremely unlikely that digital reporting against the CSRD rules will be mandatory for 2024. It’s much more likely that companies will first be obliged to report digitally for the 2025 fiscal year, meaning that data will arrive in early 2026.
We understand that the outreach event will be available from the EFRAG website in the coming days. We’ll add a link once it’s available. Stay tuned!
