Amsterdam, June 4: GRI has set out the priority changes to ensure the revised European Sustainability Reporting Standards deliver stronger global alignment, support economic resilience and reduce reporter burden.
Responding to two European Commission consultations – on the redrafted ESRS, and a new voluntary reporting standard for the thousands of companies now out-of-scope – GRI welcomes the significance of preserving both impact and financial perspectives on an equal footing, double materiality, at the heart of the EU standards.
While recognizing that simplification of the ESRS was necessary, the GRI’s response focuses on the need to:
- Strengthen alignment with international standards, to help companies avoid duplication and build on their well-established sustainability reporting practices.
- Remove the proposed exemption for assets under management, so that transparency requirements for asset managers can be aligned with global best practice, as needed to support the flow of finance to sustainable business.
- Reduce added restrictions on how companies exchange sustainability data (value chain cap), which would undermine the provision of key information needed to identify and manage impacts and risks across business relationships.
- Enhance the proposed voluntary standard by incorporating double materiality assessment and disclosures for mid-sized companies, helping sustainability information to contribute to strategy and meet the needs of investors and other stakeholders.
The submission follows GRI’s extensive engagement since 2021 on the ESRS – from co-creating with EFRAG the initial version of the standards, to providing detailed input during the Omnibus process – all with the aim of ensuring EU reporting is globally aligned and decision-useful.
Robin Hodess, CEO of GRI, said:
“Europe has sent an important signal by maintaining impact and financial materiality on an equal footing – because both are necessary for companies to assess risks, strengthen strategy and remain competitive. At a time when sustainability reporting is evolving rapidly in markets across the world, this helps create the conditions for a more coherent global system. While it is crucial that the revised ESRS delivers on simplification, it is also important that companies provide the information that stakeholders and society need.”
Susanne Stormer, Chair of the Global Sustainability Standards Board (GSSB), said:
“Effective standards enable clarity, trust and consistency. It is encouraging to see continued interoperability between the ESRS and GRI Standards, which alongside our engagement with the ISSB, can contribute to sustainability reporting on a global scale that is streamlined yet comprehensive, effectively addressing an organization’s impacts, risks and opportunities.”