8. August 2022

ASCG publishes comments on the EFRAG consultation of ESRS

On 8 August 2022, the ASCG published its comments on the exposure drafts of European Sustainability Reporting Standards (ED ESRS). In addition to the two online surveys from EFRAG, the comments include a cover letter from the ASCG in which the main points of criticism are once again pointed out. In its statement, the ASCG addresses the following aspects, among others:

  • Complexity reduction: Necessary review of the ED ESRS due to the large number and granularity of the proposed new reporting requirements; complexity reduction e.g. through
    • identification and removal of sector-specific reporting requirements or
    • rejecting the so-called rebuttable presumption mechanism, according to which all reporting requirements would initially be considered material and companies would have to indicate reporting requirements identified as immaterial together with a justification for this assessment;
  • Consistency with internationally recognised minimum standards (Global Baseline): ESRS must be consistent with internationally recognised minimum standards for sustainability reporting in the IFRS SDS;
  • Clarification of conceptual principles: Clarification of the underlying principle of dual materiality, especially with regard to the understanding of financial materiality (in line with existing concepts); Clarification of reporting boundaries, especially with regard to reporting obligations concerning the value chain;
  • Advocacy of integrated sustainability reporting: consideration of the possibilities of optional integrated sustainability reporting;
  • Facilitation of the implementation of ESRS (phasing in): initially focus on cross-thematic reporting requirements and selected environmental, social and governance disclosures (ESRS 1 and 2, ESRS E1, S1 and G1).

The appendix (to the online survey 1), which is also included in the comment, is necessary because a separate file was created with the answers to some questions due to the specified limitation of the length of the answers in the online survey (5,000 characters).

ASCG President Georg Lanfermann comments as follows: “The ASCG submission is the result of an intensive discussion of the ESRS exposure drafts and their preliminary versions in our Sustainability Reporting Technical Committee. We have succeeded in playing a formative role in shaping the German discussion on the ESRS.”

Background: With the publication of the ED ESRS, the ESRS consultation began on 29 April 2022 and ended on 8 August 2022. The submitted ED ESRS were developed by a Project Task Force (PTF-ESRS) established by EFRAG in accordance with the proposal for an EU Corporate Sustainability Reporting Directive (CSRD) of April 2021. The ESRS specify the reporting obligations on sustainability reporting included in the EU Accounting Directive. The final ESRS will be mandatory for approximately 15,000 companies in Germany. In the meantime, a political agreement on the CSRD was reached in the trilogue negotiations on 21 June 2022. A working version of the final CSRD was published on 30 June 2022.

Over the past months, the ASCG has repeatedly commented publicly on the ESRS consultation and the proposed ED ESRS. In June 2022, the ED ESRS were discussed at a joint EFRAG and ASCG outreach event. The ASCG provides an overview of both the ED ESRS and the CSRD in German.