European sustainability standards expected within 18 months
In an interview with ESG Investor, Patrick de Cambourg, Chair of the European Financial Reporting Advisory Group (EFRAG) task force charged with developing non-financial standards, has said Europe could have sustainability reporting standards within 18 months. With new disclosure rules set to come into force in January 2024, firms need standards ready to use by 2022.
The recently announced Corporate Sustainability Reporting Directive (CSRD), which will deploy Inline XBRL to extend sustainability reporting to many more companies across Europe, provides a strong foundation – and impetus – for standards development. EFRAG will be working closely with existing reporting frameworks and with endeavours to develop a global standard, and is already meeting with international standards setters.
“We want to build on and contribute to international initiatives, not reinvent the wheel,” said de Cambourg. “But we have to apply a new filter that corresponds with the EU’s underlying ambitions.” In particular, he drew attention to Europe’s ‘double materiality’ requirement that disclosures capture risks both to and of companies’ activities, with companies responsible not only to investors but civil society as a whole.
No specifics, as yet, on the plans to build the necessary XBRL taxonomies.
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