Last week marked the deadline for the regulation feedback period of the European Sustainability Reporting Standards (ESRS) – First set of Draft, the backbone of the Corporate Sustainability Reporting Directive (CSRD).
The industry lobby has pressured the European Commission to make changes in the proposed set of drafts that were put together with the technical advice of EFRAG. If these changes go through, these will result in a dilution of crucial parts of impact accounting standard. Key elements that initially were mandatory, would now become voluntary, such as proposing transition plans to reduce damage in matters of biodiversity, or reporting on wages and safety of freelancers and temporary workers. Transparency on Greenhouse Gas Emissions would depend on the relevance of the company, and the obligation to provide specific data for investors would be removed. A diluted standard would result in companies finding it difficult to distinguish themselves on sustainability.
To make sure that these documents guarantee meaningful sustainable accounting rules under the Corporate Sustainability Reporting Directive, Impact Institute, together with True Price, the Impact Economy Foundation, and B Lab Europe, have launched the CSRD.org advocacy initiative.
Why do we support CSRD? Because it is a European directive that introduces strict rules regarding corporate social and environmental disclosure, making the exposure of climate and biodiversity transition plans mandatory. The logic behind the initiative of the European Commission is contemporary, companies that create more social value can be rewarded, and companies that cause more damage, not at all.
Stay tuned for further updates, because even if the feedback period is over, we will remain involved and work towards making sure the standard stays robust and develops in the right direction!