The ESRS, or European Sustainable Reporting Standards, were adopted by the European Commission after an ongoing public consultation in late June and early July. This means that we are in the final straight before their implementation. They are adopted in the form of an ordinance. They do not require transposition into national law, as they will apply directly in all member countries. Now the EC is beginning a two-month period of scrutiny of the act by the European Parliament and the Council of the European Union. This time can be extended up to 4 months. Importantly, the EC can no longer change the provisions of the implementing regulation.
ESRS after EC public consultation
The European Sustainable Reporting Standards have been subject to public consultation on several occasions, whether conducted by EFRAG or the EC. The last collection of comments lasted from June 9 to July 7, 2023. The EC summarized the consultation process on its website. The submitted draft received 604 comments. Among the most active countries, one must mention Germany (111 comments), Belgium (101 comments) and the Netherlands (76 comments). Eighteen applications were received from Poland.
Not surprisingly, representatives of companies (26.7%) and business organizations (24.2%) had the most to say on the matter. It is the companies that will be most affected by the requirements introduced by the ESRS. Entities representing NGOs also took an active part in the public consultations.
The ESRS have been adopted by the EC and what’s next?
The adoption of the European Sustainable Reporting Standards by the EC is just the beginning. They will most likely take effect on January 1, 2024, as envisioned in the CSRD. In parallel, EFRAG is working on the development of industry-specific ESRS. This is because the standards adopted by the EC are general in nature and apply to all companies covered by the CSRD. This means that we will only learn the full package of data for reporting in the coming months. Still, to be clued up on ESRS requirements, one needs to keep abreast of the work of the EC and EFRAG.