EU standard setter EFRAG has launched a call for candidates for three advisory bodies to opine on the “development and maintenance” of sustainability reporting standards for the financial sector, as part of the bloc’s wider European Sustainability Reporting Standards (ESRS).
Players from banking, insurance and capital markets have been encouraged to apply to join the EFRAG Sustainability Reporting FI Advisory Panels, which are comprised of the SR Banking Advisory Panel, SR Capital Markets Advisory Panel and SR Insurance Advisory Panel.
The objective of the new bodies is to advise EFRAG’s sustainable reporting technical expert group on the development and maintenance of the sector-specific ESRS on financial institutions “and in general to provide sector-specific input in EFRAG sustainability reporting activity”.
Each panel will share “technical inputs” into draft sector standards. The panels will also work on providing “value chain guidance” for their respective sectors on the sector-agnostic ESRS standards published on 9 June.
The new panels, which will be made up of around 20 members, will be expected to meet at least six times a year, including twice in-person, with activities starting in September.
The deadline for applications is 31 July.
Earlier this month, the European Commission published the first set of ESRS, which are the reporting standards under the EU’s new Corporate Sustainability Reporting Directive (CSRD).
Concerns were raised by some in the market as almost all the reporting requirements under the ESRS were revealed to be subject to a materiality assessment. Under the draft proposal handed to the commission by EFRAG, many reporting indicators, including the those related to climate change, were mandatory.
Brussels observers say there has been intense lobbying to weaken CSRD, particularly in recent months.
Some market participants have also noted a recent shift in the commission’s narrative around corporate reporting. EC president Ursula von der Leyen said in March that the commission would seek to reduce reporting requirements on companies by 25 percent.
That month, the commission also told EFRAG to prioritise producing additional guidance on the sector-agnostic ESRS ahead of preparatory work on sector-specific standards.
But speaking virtually on 13 June at RI Europe, Martin Spolc, sustainable finance head at the commission’s financial services arm, said the EU’s incoming corporate sustainability disclosure rules remain ambitious and are not on track to become a voluntary regime.
“We have added to the excellent proposals by EFRAG and tried to be a bit more proportionate in view of the fact that not all companies should have to disclose every KPI which may not necessarily be super-relevant for their business,” he told attendees.
ISSB opens Beijing office
Meanwhile, the IFRS Foundation has opened a Beijing office for its sustainability offshoot, the International Sustainability Standards Board (ISSB).
Since its inception, ISSB – which seeks to develop a global baseline for corporate sustainability reporting – has sought to create a “multi-location presence”.
The Beijing office will act as a hub for stakeholder engagement in Asia, facilitating “deeper co-operation and engagement with stakeholders, and undertaking capacity-building activities for emerging economies, developing countries and SMEs”, IFRS said this week.
The opening follows the signing of a memorandum of understanding between the IFRS Foundation and the Chinese Ministry of Finance in December 2022.
Last year, China challenged the “global baseline” status of ISSB’s disclosure standards.
Responding to a consultation on the draft standards, China’s finance ministry recommended that the ISSB “re-examine” the positioning of its standards as a “global baseline” given its failure to fully cater for the capabilities of different jurisdictions to meet them.
Li Xianzhong, director-general at the ministry’s accounting regulatory department, wrote: “The requirements proposed in the [exposure drafts] are of such high standards (eg, Scope 3 and scenario analysis) that it has not fully considered the differences in economic development levels of different countries and in sustainability disclosure regulatory capabilities.”