CSRD: state of play before the final EU negotiations

About the event

As the three EU institutions are kicking off the Trilogues negotiations on the Corporate Sustainability Reporting Directive, Accountancy Europe and ACCA wanted to bring more clarity on what the positions of the two co-legislators (The European Parliament (EP) and the Council) are and what the main stumbling blocks are likely to be. During the joint online event, which was attended by over 620 participants - including several ACCA members from across the EU - the European Commission presented a state of play on the file, and speakers representing investors, business, the accountancy profession and civil society shared their insights and recommendations.

CSRD: state of play before the final EU negotiations event video

The discussion moderated by Olivier Boutellis Taft, the CEO of Accountancy Europe, welcomed on the European Commission side Erik Van Der Plaats, Policy Officer, Corporate Reporting, Audit and CRAS unit, at DG FISMA, and on the stakeholders’ side Stanislas Pottier, Senior Advisor to the General Management at Amundi; Anne-Hélène Monsellato, representing EcoDa & Independent Director, as well as Audit and Risk Committee Chair of Euronav and Genfit; Rami Feghali, Vice Chair of the Sustainability Policy Group of Accountancy Europe and Filip Gregor, Head of Responsible Companies at Frank Bold.

The lively and interactive discussion offered concrete experts’ insights, exchange of best practices and possible suggestions for solutions. The issues addressed covered the points that will likely be the most discussed during the Trilogues negotiations, with a special focus on the scope of the CSRD - especially whether non-EU companies should be captured and the desire to protect SMEs from unnecessary administrative burden, while at the same time making sure SMEs will still have access to sustainable finance; the expected timeline for reporting requirements; and assurance of the reported sustainability information and whether there should be a strict separation between audit and sustainability assurance service providers. The debate revealed the need for harmonization/standardization of the baseline for sustainability reporting standards, the need for integration, and a clear call for simplicity, as a driver of efficiency. However, it was also stressed that while some issues can be easier to assess, such as climate, it may be much more difficult for other subject matters. In that case it’s questionable whether simplicity by itself would not be more harm than good- it will be important to strike the right balance between simplicity and specificities of complex matters. To be effective we will need less information quickly, and gradually more. Climate is not waiting.

Next steps: there was only one trilogue meeting so far on 28 March and the next one is expected for 7 April. Both the EP and the Council are aligned on the importance of the CSRD in the context of the green deal and Climate Change, they are very keen reach political agreement by the end of June, under the French presidency. The 3 institutions are also very aware of the need to move forward with developing the Corporate sustainability language (the ESRS). Once the Directive will be adopted, the next steps will be the transposition of the CSRD into national law by EU Member States and the adoption of the reporting standards by the European Commission. The first-time application currently expected for financial years starting 1 January 2024 at the earliest.

Main highlights

• On the issue of the scope, the European Parliament and the Council have different positions. Panellists discussed their views on the appropriate scope for sustainability reporting to achieve the Green Deal objectives, and whether SMEs should be complying with sustainability reporting requirements.