The European Commission has published a proposal for a Corporate Sustainability Reporting Directive (CSRD), paving the way for much-needed mandatory European sustainability reporting standards (ESS).
Insufficient availability of meaningful, comparable, reliable and public ESG data is a key impediment to realising the full potential of the EU’s sustainable finance regulatory framework. EFAMA, therefore, encourages the co-legislators to maintain the ambition of this proposal.
Tanguy van de Werve, Director General of EFAMA, says: “The limited scope of the Non-Financial Reporting Directive and the inconsistent sustainability reporting ecosystem constrain investors’ ability to assess the ESG performance of investments. This CSRD proposal is essential in reducing the ESG data gaps faced by asset managers and supporting the development of green investment products. We call on the co-legislators to maintain the high level of ambition of the Commission’s proposal and to ensure its swift adoption. Time is of the essence.”
Dominik Hatiar, Regulatory Policy Adviser at EFAMA, adds: “The proposed mandatory, assured and digitalised European sustainability reporting standards will be the primary source of input for asset managers’ disclosures under the Sustainable Finance Disclosure Regulation and the EU taxonomy’s ‘green asset ratios’. In the context of the EU Green Deal and Recovery Plan, we see the proposed CSR Directive as a key enabler for taxonomy-aligned sustainable investments and look forward to the first disclosures becoming available on 1 January 2024.”
EFAMA stresses that the timing and content inconsistencies between the non-financial and financial undertakings’ ESG disclosure requirements remain a real challenge. Whereas companies are unlikely to provide ESS disclosures before 2024, asset managers will have to report as of 2022 under the SFDR and the taxonomy on very specific indicators of the companies in their portfolios.