08 August 2022

ICMA responds to draft European Sustainability Reporting Standards proposed by EFRAG

The International Capital Market Association (ICMA) welcomes the opportunity to provide feedback on
the first set of the European Sustainability Reporting Standards (ESRS) proposed by the European
Financial Reporting Advisory Group (EFRAG), as envisaged by the upcoming Corporate Sustainability
Reporting Directive (CSRD). Relatedly, ICMA also welcomes the recent provisional political agreement
reached between the co-legislators on the CSRD. The EFRAG’s technical advice on the ESRS, which is the subject matter of this consultation, will inform the delegated acts that will be adopted by the European Commission to provide the disclosures requirements under the CSRD.

ICMA is a membership association, headquartered in Switzerland, committed to serving the needs of its
wide range of members. These include private and public sector issuers, financial intermediaries, asset
managers and other investors, capital market infrastructure providers, central banks, law firms and
others worldwide. ICMA currently has around 600 members located in over 65 jurisdictions.

This feedback is given on behalf of ICMA and its constituencies representing, among other, issuers and
investors in the global debt capital markets for whom corporate sustainability reporting is important as
part of their strategy, financial planning, and analysis. In a wider context it is also important to the
global sustainable bond market underpinned by the voluntary product standards represented by the
Principles supported by ICMA.

ICMA supports the development of a European standard for sustainability reporting based on the
double materiality perspective and which will produce understandable, relevant, verifiable, comparable,
and faithful sustainability information, while at the same time, be proportionate as well as
interoperable and consistent with international initiatives. The key points that we are making in our
response are in summary:
• Double materiality: ICMA welcomes the double materiality perspective by the CSRD and ESRS
as it will, among other, provide a more comprehensive picture to investors and promote
transparency to all other stakeholders.
• Balancing prescriptiveness with usability: While ICMA welcomes the high ambition
underpinning the ESRS, it recommends: (i) attributing more weight to sector-specific
disclosures; (ii) ensuring data calibration; and (iii) providing flexibility for undertakings in the
initial experimentation and capacity building phase.
• Implementation of value chain reporting: ICMA supports the incorporation of value chain
reporting (including Scope 3 emissions, where relevant) while also welcoming the recognition of
potential implementation challenges. ICMA recommends further consideration of
proportionality and gradual implementation to ease adoption, including via the prioritisation of
reporting boundaries and sustainability topics.
• International operability and usability: ICMA emphasises the importance of interoperability
and consistency of reporting standards and encourages further dialogue and exchange between
EFRAG and ISSB (as well as other bodies and jurisdictions) to avoid or minimise divergences and
advance towards a convergent standard.
• Climate-related reporting and transition: ICMA recognises the importance of transition plans
and supports the inclusion of Scope 3 emission reporting, where relevant...

full response

ICMA

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