16. January 2024

ASCG Comment letter on ESRS Implementation Guidance (MAIG, VCIG)

On 16 January 2024, the ASCG has submitted its feedback on EFRAG’s Draft IG 1 Materiality assessment implementation guidance (MAIG) and Draft IG 2 Value chain implementation guidance (VCIG). The feedback was provided via web-based surveys set up by EFRAG for this consultation. In addition, the ASCG has addressed a letter with the same content to the EFRAG SR Board.

In its feedback, the ASCG highlights, among other things, the high level of discretion and individual judgement required when performing the materiality assessment. Following, at least in the first years of ESRS application, a certain level of tolerance of all parties involved is required with regard to consistency in setting thresholds and similar issues, and, therefore, with regard to the outcome of the materiality assessment itself.

Specifically, the feedback addresses certain points of criticism identified by the ASCG’s Sustainability Reporting Technical Committee and the ASCG staff. The comments on the materiality assessment include, for example, gross and net reporting of potential impacts and the interplay between the materiality assessment and the EU Taxonomy Regulation. Issues relating to the Value Chain Implementation Guidance include the relevance of the operational control approach, as well as whether the obligation to develop and disclose entity-specific metrics also extends to the value chain.

The comment letter on the Draft EFRAG IG 3 Detailed ESRS datapoints implementation guidance is currently being prepared. The DRSC also intends to submit its feedback on this before the end of the consultation period.