Plans for EFRAG to broaden role requires establishment of a professional sustainability standard setting function. As part of the European Commission review of the Non-financial Reporting Directive (NFRD), it is exploring how new European sustainability standards could be created and managed.
The Commission has asked the European Financial Reporting Advisory
Group (EFRAG) to consider the changes needed to its governance, if it
were to take on responsibility for creating non-financial reporting
standards. Until now, EFRAG’s remit has been to advise on financial
standards only.
In this context, GRI has submitted a response to EFRAG’s
consultation, setting out how GRI and the Global Sustainability
Standards Board (GSSB) can contribute to the European solution. This
includes addressing the need for one global set of sustainability
reporting standards, in order to secure the necessary changes to achieve
a sustainable economy.
GRI supports a proposed governance change by EFRAG that would
introduce a two-pillar structure for financial and non-financial
reporting, which is needed to ensure both are given equal weight and
rigor.
The GRI Standards, the most widely used sustainability reporting
standards in Europe and beyond, are well positioned to play a key role
in achieving the Commission’s aims to improve and expand non-financial
reporting in the EU. Furthermore, our globally applicable, independent
standards can be a bridge to achieving an international solution. The EU
has an opportunity to provide global leadership, as the first major
jurisdiction to mandate sustainability reporting with the same rigor as
financial reporting. GRI stands ready to work with EFRAG and the
Commission to make this a reality.”
Peter Paul van de Wijs, GRI Chief External Affairs Officer
The European Commission is reviewing the Non-financial Reporting Directive,
which requires large companies operating within the EU to publicly
disclose sustainability information. It is expected to share its final
proposal by the end Q1 2021.
A consultation on the changes to EFRAG’s governance closed on 14 January. GRI’s response aligns closely with our IFRS consultation contribution from December (and a previous submission provided in October to the EFRAG Project Task Force).
GRI
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