The European Fund and Asset Management Association (Efama) has said the accelerated development of mandatory European sustainability reporting standards (ESS) could “become a game-changer unleashing the impact of sustainable finance”.
The lobby group was reacting to recommendations delivered to the European Commission by EFRAG yesterday,
which the Commission has said it will take into account ahead of
presenting its proposal for a revised Non-Financial Reporting Directive
(NFRD), scheduled for next month.
Efama said it believed that mandatory ESS were “essential for the
achievement of the EU´s Green Deal objectives and evolving sustainable
finance policies, and at the same time, drive cooperation towards
convergence behind a global sustainability reporting architecture”.
It said the EFRAG proposals were positive in several ways, including
because they recognised the need for an urgent solution and aimed to
“operationalise the double materiality concept and strengthen the
interactions between impact and financial materiality perspectives”.
It also expressed approval for the recommendation to contribute to
international standard-setting initiatives in a “co-constructive
spirit”.
The group also highlighted the benefit of ESS in addressing
inconsistencies within the EU sustainable finance policy package, a
point also made by the EFRAG taskforce.
Efama said the corporate ESS disclosures should be channelled into
the European Single Access Point (ESAP). The ESAP refers to the notion
of a centralised European database, the establishment of which is the
first action on the Commission’s latest action plan for a capital markets union.
Efama said the ESAP should “prioritise the centralisation of ESG company data on the principle of open access”.
“We also find that the information reported under an ESS can help
corporate directors set credible targets and sustainability objectives,
and asset managers perform their role as stewards of investee companies,
contributing to the objectives of the sustainable corporate governance
initiative,” it said.
Dominik Hatiar, regulatory policy advisor at Efama, said: “The EU’s
sustainability disclosure ecosystem should cooperation towards a
globally accepted system by leveraging alignment with existing, highly
relevant frameworks, such as SASB and TCFD.”
The Global Reporting Initiative (GRI), a standard-setter focussed on
companies’ social and environmental impacts, also saw a close alignment
between the proposed ESS approach and its standards.
“We welcome the intent to work with existing sustainability reporting
initiatives and the recognition that sustainability and financial
reporting are of equal importance,” said Eric Hespenheide, chair of GRI.
“GRI looks forward to working with the Commission and EFRAG,
contributing our expertise and unique perspective from more than 20
years as the global pioneer of sustainability reporting.”
IPE
© IPE International Publishers Ltd.
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