ESMA bolsters corporate sustainability reporting with new guidelines
Earlier this month the European Securities and Markets Authority (ESMA) published a Final Report on the Guidelines on Enforcement of Sustainability Information (GLESI) and a Public Statement on the initial application of the European Sustainability Reporting Standards (ESRS). Released on 5 July, these documents aim to drive the consistent application and supervision of sustainability reporting requirements across the EU.
The GLESI provides a structured approach to the supervision of sustainability information disclosed by issuers listed on EU regulated markets. It aligns with ESMA’s long-standing Guidelines on Enforcement of Financial Information (GLEFI), adapting its principles to the specifics of sustainability reporting. This alignment ensures that the enforcement of sustainability information is consistent with financial information enforcement, promoting a level playing field for all issuers.
The GLESI also aims to foster convergence in sustainability reporting supervisory practices across EU national authorities by providing essential guidance to enforcement. The GLESI includes 22 guidelines across six areas, such as enforcers’ internal organisation, selection, examination, and enforcement actions, ensuring a comprehensive approach to supervision. ESMA plans to translate these guidelines into all EU languages to support broad adoption.
Meanwhile, ESMA’s Public Statement on the first-time application of the ESRS provides targeted guidance to large public-interest entities that will be among the first to publish sustainability statements under the ESRS starting in 2025. The statement highlights several critical areas to ensure high-quality and compliant sustainability reporting, including governance and controls, double materiality, transitional reliefs, digitisation-ready reporting, and connectivity between financial and sustainability information. ESMA also emphasises the importance of ongoing education use of training resources for successful implementation of the ESRS.
These measures form part of ESMA’s broader strategy, which emphasises promoting EU capital markets as a hub for green finance and improving supervisory consistency across the EU. The agency plans to publish its European Common Enforcement Priorities for the next reporting period later in 2024, which will include a focus on sustainability reporting.
To delve deeper into these new measures, find the Public Statement and GLESI here.
