Earlier this year, the Commission adopted the first set of European Sustainability Reporting Standards (ESRS) – the first in the world comprehensive, mandatory set of sustainability reporting standards leveraging the common language of the EU Taxonomy and taking it a step further: how to report and collect sustainability data in practice.
During the EFRAG conference on 28 November, European Commissioner Mairead McGuinness delivered a long-anticipated announcement regarding the implementation of ESRS signalling a pivotal moment that has been on the radar of companies and consultants in the EU and globally this year.
The official adoption of the XBRL European Sustainability Reporting Standards (ESRS) taxonomy will be delayed. The rollout of the ESRS digital taxonomy for the Corporate Sustainability Reporting Directive (CSRD) reporting appears to be set for 2025.
The political endorsement for ESRS is evident; however, the actual implementation hinges on the actions of the next Commission which starts in 2024.
Impact of the delay on ESRS reporting for companies
‘A short delay. But don’t delay’ – we can’t agree more with the XBRL International stressing a necessity for companies to adopt a digital mindset from the outset. The delay in the ESRS digital taxonomy rollout presents an opportune moment for companies to automate inefficient manual processes in advance and ensure the relevance and visibility of these reports through digital thinking around climate and sustainability disclosures.
EFRAG has confirmed the forthcoming publication of the ESRS taxonomy for consultation in January and has prepared a list of datapoints (see EFRAG SRB Meeting 25 October – EFRAG, agenda item 5) for the (future) XBRL ESRS taxonomy.
We’ll be keeping a close eye on the related upcoming developments. Sign up for our newsletter to stay in the know.
Getting ready for the ESRS reporting
Getting prepared for the ESRS/CRSD reporting, companies are proactively assessing their digital data management processes and systems for sustainability data disclosures compliant with upcoming rules. Setting up the relevant tools and processes for sustainability data sourcing, compilation and assurance of its quality is now essential. Especially as the regular disclosure task will engage various teams, from legal and ESG regulatory compliance experts, ESG experts, data and reporting specialists as well as IT departments onboarding the necessary tools for data collection, reporting, proper storage and most importantly analysis.
No doubt, telling your ESG story properly – not only for compliance but also to meet your stakeholders expectations (investors, customers, business partners, employees) – takes the establishment of a strong Sustainability data strategy, coupled with regtech and governance approach to manage the technical complexity, and change management which is inevitable when we look at regulatory cycles.
The strategy should include an important add-on, namely verification of your team understanding of data requirements as defined in the ESRS taxonomy and as further required to report in the technical format of XBRL (eXtensible Business Reporting Language).
Download our ESRS implementation guide to check the updated timeline for reporting to gain a better understanding of what steps you need to take to achieve ESRS excellence and how it can support your overall sustainability goals. Our experts in ESRS taxonomy and regulatory data management will assist you in that.
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