European Sustainability Reporting Standards

On 9 June 2023 the European Commission (COM) has issued its draft delegated act on Set 1 of European Financial Reporting Standards (ESRS). This act supplements the Accounting Directive as amended by the Corporate Sustainability Reporting Directive, which requires large companies and listed companies to publish regular reports on the social and environmental risks they face, and on how their activities impact people and the environment. This first delegated act sets out cross-cutting standards and standards for the disclosure of environmental, social and governance information. Background details: The EU Accounting Directive (Directive 2013/34/EU) recently amended through the CSRD, requires a number of entities in the EU and some non-residential entities to prepare sustainability reports according to ESRS. EFRAG has been mandated to develop these standards and give technical advice to the COM.

The final delegated acts are expected to be adopted by the COM in July 2023.