News

Takeaways from the recent EFRAG SR TEG meeting

February 19, 2024

In April 2021, the European Commission adopted a legislative proposal for a Corporate Sustainability Reporting Directive (CSRD) that requires companies within its scope to report using a double materiality perspective in compliance with European Sustainability Reporting Standards (ESRS) adopted by the European Commission as delegated acts. Under the proposed CSRD, EFRAG was appointed technical adviser to the European Commission developing draft ESRS. Double materiality refers to the consideration of both people and planet.

EFRAG recently issued an installment of answers to various community questions covering things like how to report avoidances from nuclear energy, how subsidiaries report, how to report a fuel mix, how Insurance companies are to report, minimum number of material matters, among many other items. This is part of ongoing discussions and community feedback and is not the final word on any of these things. However, the text in blue is EFRAG’s current thinking and explanation on these topics and is illuminative for understanding some of these minutiae that will be necessary for companies to consider. DriveKey is keeping tabs on all these developments so that your company does not have to. If you have any questions about any particular aspect of CSRD or just need an overview, please contact us at __________________

CSRD reporting deadlines

June 2024: CSRD Standards will be published

For an array of sustainability topics but including greenhouse gas emissions and targets that DriveKey can assist with.

Large public companies: FY2024 (reports published in 2025) for listed companies with over 500 employees

Mid-size: Companies with more than 250 employees and/or more than €40 million in net turnover and/or more than €20 million in total assets must comply with the CSRD rules starting January 1, 2025, with reports due in 2026.

SMEs: CSRD rules will apply starting January 1, 2026, with reports due in 2027. Listed SMEs can opt out until 2028.

Earliest Upcoming requirement: All large publicly listed companies will have to report their 2024 performance in 2025

SFDR

June 30, 2024 is the final deadline for financial market participants to submit the second report. Starting from this point, they are also required to compare data from the first and second reference periods.

EU Taxonomy

As of January 2023. What percentage of your sales or services have some sort of application to the following? By 2023 your company would need to fill out the question sets under each of these categories to be in compliance and to have your results be marketable.  The objectives were devised in 2021 and your company should have had its first audit of them by January of last year. Our team has conducted EU Taxonomy audits (including technical criteria) and can assist you in getting this done.

SEC

The SEC will consider finalizing its March 2022 proposal by the spring of 2024. Apparently there has been push back by public companies, particularly against some of the provisions such as including scope 3 greenhouse gas (GHG) emission disclosures, 1%-materiality threshold for financial statement disclosures, and possible third party verification requirement of scope 1 and scope 2 GHG emissions for larger companies.

EU Taxonomy

Objective - January 2023

Mitigation - January 2023

Adaptation - January 2023

Sustainable use and protection of water and marine resources - January 2023

Transition to a circular economy - January 2023

Pollution prevention and control - January 2023

The protection and restoration of biodiversity and ecosystems

January 2023

CBAM

Start Applying - October 1 2023

Transitional Period with no financial implications through January 1 2026

TCFD

Over 120 regulators and governmental entities worldwide support the TCFD. Brazil, Hong Kong, Japan, New Zealand, Singapore, Switzerland, the United Kingdom and the European Union have made TCFD reporting mandatory for certain entities.

Depending on location, the incept date and reporting deadlines may vary . For example in the UK, the second phase of the FCA’s rules are now in effect. As of January 2023, firms exceeding £5bn in AuM are required to have their first publication by 30 June 2024.