The Corporate Sustainability Reporting Directive (CSRD) is already in effect as of December 2022. More than six months later, the EC published its first reporting standards, the ESRS. We have already written about the draft of these reporting guidelines inWater Matters.

Puzzling changes in the draft regulation

Consulted for a period of four weeks, from June 9, 2023, the draft delegated regulation to the CSRD is expected to put the guidelines developed by EFRAG into law. At first glance, the regulation contains previously prepared documents. However, the changes made by the EC do not concern the scope of information, but which elements will be mandatory in the ESRS.

Under CSRD requirements, more groups of companies would have to disclose non-financial information starting in January 2024. The draft regulation for the ESRS introduces additional ways to push back mandatory reporting. In addition, the scope of reported information has also been changed. Provision of most data is to be voluntary.

According to the EC’s explanation, the proposed changes are a convenience for businesses and, as estimated, will save up to €1.17 billion compared to the version presented by EFRAG. It should be emphasized, however, that the ESRS changes also have implications related to the fact that many other regulations and obligations are based on data extracted from the CSRD. Voluntary disclosure of some data will also reduce public scrutiny of greenwashing. The proposal in this regard by the EC shows that Green Deal ambitions are being downgraded.

Delays and unknowns – implementation problems

According to the timetable presented by the EC for the implementation of the CSRD, the delegated regulation introducing the ESRS should be published by the end of June 2023. Given that public consultations will last until July 7, 2023, this deadline will be postponed.

The unknown all the time remains the so-called “unknowns. Sector-specific ESRS. These reporting standards are still being developed by EFRAG. As the draft regulation introducing the common ESRS shows, the proposal may differ significantly from the final content of the legislation.

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