EFRAG invited to contribute immediately to the elaboration of draft EU sustainability reporting standards (ESRS)

Source: EFRAG, 10 July 2021

​Committed to the ambitious timeline for a major step in quality sustainability reporting, EFRAG has successfully initiated the elaboration of EU sustainability reporting standards to be submitted to the European Commission.  On 21 April 2021 the European Commission adopted a legislative proposal for a Corporate Sustainability Reporting Directive (CSRD).  At the request of the European Commission and in parallel to the elaboration of the legislative proposal, EFRAG has already carried out extensive work on key governance and standard-setting matters related to sustainability reporting. Two reports published on 8 March 2021 provide a full account of the proposals made:

Under the proposed CSRD, EFRAG would develop draft standards, using proper due process, public oversight and transparency, and with the expertise of relevant stakeholders.
The timeline contained in the proposal assumes the elaboration of draft sustainability reporting standards in parallel to the legislative process of the proposed CSRD. To meet this timeline, Commissioner McGuinness, in a letter dated 12 May 2021​, has requested EFRAG to:
(i) reform its governance following the recommendations by Jean-Paul Gauzès in his report which were fully supported by Commissioner McGuinness, and
(ii) put in place interim working methods to start the technical work immediately building on the membership, leadership, expertise and recommendations of the PTF-NFRS.

As a consequence, the PTF-NFRS established in September 2020, is now called the Project Task Force on European sustainability reporting standards (PTF-ESRS). The PTF-ESRS has been invited to start elaborating standards in project mode in view of passing responsibility to the EFRAG sustainability reporting bodies as soon as they have been established following the planned governance reforms.

Most of the 35 PTF-NFRS members, originating from 13 Member States and from all relevant backgrounds, have expressed their willingness, availability, and enthusiasm to contribute to this new crucial phase as PTF-ESRS members. A few changes have been organised to fill the gaps. Public authorities have all expressed their willingness to contribute. See the press release for the full composition of the PTF-ESRS.
The plenary kick-off meeting took place on 9 June 2021 and established the base for a swift start:
  • Objectives and milestones, in alignment with the CSRD timeline and the EFRAG governance reform timetable;
  • Organisation in clusters, reflecting the target architecture proposed in the PTF-NFRS report;
  • Allocation of tasks and responsibilities, consensus building and rules of engagement;
  • Due process procedures (under public consultation) and templates.
In compliance with the PTF-NFRS proposals and the CSRD proposal, the PTF-ESRS is keen to build on and contribute to international convergence.
Jean-Paul Gauzès, President of the Board of EFRAG, said: ‘We are honoured to be entrusted with this important mission by the European Commission, and grateful for the work performed by the Task Force and the continuation of its work within the ambitious timelines. It is our joint responsibility to ensure an ambitious and robust development of high-quality EU sustainability reporting standards that are as widely accepted as possible – both within the EU and globally.’

Patrick de Cambourg, Chair of the PTF-ESRS, said:  ‘Building on its membership, consensus building processes and report issued in February on the preparatory work to sustainability standard-setting, the Task Force is proud and committed to move to this important  new step. The elaboration of the technical advice to the European Commission on​​​​ EU sustainability reporting standards starts immediately with a view to progress swiftly and to hand over what will be achieved in the coming months to the sustainability reporting bodies of EFRAG as soon as established and operational.’

In the coming months, EFRAG will provide regular progress reports on the work of the PTF ESRS on its website: www.efrag.org.