More than 300 organizations have issued a strong declaration calling for the preservation of the European Sustainability Reporting Standards (ESRS) and the Corporate Sustainability Reporting Directive (CSRD). This coalition of investors, businesses, and other entities is concerned that proposed simplifications by the European Commission could dilute the effectiveness of crucial sustainability legislation.

Key Takeaways

• Over 300 organizations are advocating for the preservation of the CSRD's core principles.
• Concerns exist that the European Commission's simplification plans could weaken sustainability rules.
• The "double materiality" foundation of the CSRD is highlighted as essential.
• The CSRD and CSDDD are seen as vital for EU sustainability and competitiveness goals.
• Interoperability with global standards must be maintained.

Safeguarding Sustainability Ambitions

The joint statement emphasizes the critical role of the CSRD and the Corporate Sustainability Due Diligence Directive (CSDDD) in fostering resilience and ensuring a fair competitive landscape across the European Union. Signatories argue that regulatory simplification should not come at the expense of the substance or the significant benefits these rules provide to businesses.

Concerns Over Simplification

The European Commission's initiative to simplify reporting requirements, including plans for a voluntary standard for small and medium-sized entities (SMEs), has raised alarms within the sustainability community. The coalition is particularly focused on safeguarding the CSRD's "double materiality" principle, which requires companies to report on both how sustainability issues affect them and how their activities impact society and the environment.

Maintaining Global Interoperability

Furthermore, the statement stresses the importance of ensuring that any modifications to the ESRS do not compromise the interoperability with global sustainability standards. This includes standards set by the Global Reporting Initiative (GRI) and the International Sustainability Standards Board (ISSB), which are crucial for consistent and comparable sustainability reporting worldwide.

A Call for Uncompromised Progress

The collective voice of these organizations underscores a commitment to achieving the EU's broader sustainability, growth, and competitiveness objectives. They believe that progress in sustainability reporting can be advanced through simplification without sacrificing the integrity and impact of the existing framework.

Sources

• Over 300 organisations call for preservation of CSRD, Financial Management magazine.