Exposure Drafts on sustainability reporting standards for SMEs
Published 13 March 2024
Category: Impact and ESG
The European Financial Reporting Advisory Group (“EFRAG”) has launched a public consultation on the Exposure Draft European Sustainability Reporting Standards for listed SMEs (“ESRS LSME ED”) and the Exposure Draft for the voluntary reporting standard for non-listed SMEs (“VSME ED”).
ESRS LSME ED is developed by EFRAG under the mandate granted by the Corporate Sustainability Reporting Directive (“CSRD”) and is relevant for SMEs that are public interest entities. It is expected to be issued as a delegated act with effect from 1 January 2026 (with a 2-year opt out). The standards are expected to support listed SMEs in getting better access to finance and enable availability of standardized sustainability information. The standards are composed of three general sections: (i) general requirements, (ii) general disclosures and (iii) policies, actions and targets – along with three sections dedicated to environment, social and business conduct.
VSME ED is a voluntary sustainability reporting standard for non-listed SMEs. It suggests a simple reporting tool to assist non-listed SMEs in connection with sustainability information that they receive from business counterparts. The standard may be regarded as a measure to support SMEs in accessing sustainable finance. EFRAG expects that the VSME ED will standardize the current multiple ESG data requests by reducing the number of uncoordinated requests non-listed SMEs receive. Thus, reducing the significant burden ESG data requests tend to be on non-listed SMEs. The standard is structured in a basic module with two additional optional modules: (i) Narrative-Policies, Actions and Targets (PAT) and (ii) Business Partner Module.
More information from EFRAG on the two Exposure Drafts and how to provide responses to the consultations can be accessed here.
Next steps: The consultation period is open until 21 May 2024.
Tags: CSRDESRSSustainability
Also tagged ‘CSRD’
Registration of “sustainability auditors” is now possible
On 1 June 2024, the new rules on requirements to companies’ sustainability reporting (entailed by CSRD) entered into force.
CSRDSustainabilityMeasures to support corporate sustainability reporting
In July, the European Securities and Markets Authority (“ESMA”) published measures to support corporate sustainability reporting.
CSRDESMAESRSSustainabilityThe Danish implementation of CSRD has been adopted
Today, 2 May 2024, the Danish Parliament adopted the final legislative proposal to implement the Corporate Sustainability Reporting Directive (“CSRD”) into Danish legislation.
CSRDSustainabilityProposal for Danish implementation of CSRD out for consultation
On 13 October 2023, the legislative proposal for implementation of the Corporate Sustainability Reporting Directive (“CSRD”) and a number of appertaining executive orders went out for consultation.
CSRDSustainabilityEuropean Sustainability Reporting Standards have been adopted
On 31 July 2023 the European Commission adopted European Sustainability Reporting Standards (ESRS) which are mandatory standards for companies under CSRD to use when reporting on sustainability information.
CSRDESRSSustainabilityOpinions issued on the draft European Sustainability Reporting Standards
The European Financial Reporting Advisory Group (EFRAG) submitted a draft set of European Sustainability Reporting Standards (ESRS Set 1) to the EU Commission in November 2022.
ComplianceCSRDESMAESRSSustainabilityFinal Report on Minimum Safeguards
The European Commission expert group; Platform on Sustainable Finance, has published a final report on the minimum safeguards laid out in Article 3 and 18 of the Taxonomy Regulation. It replaces the draft report published in July 2022.
ComplianceCSDDDCSRDSustainabilityFinal Adoption of the CSRD
The CSRD has now been finally adopted after the Council of the European Union on 28 November 2022 approved the European Parliament’s position. On 16 December 2022, the directive was published in the Official Journal. The date of entry into force is 20 days from the publication date.
ComplianceCSRDSustainabilityCSRD has been Passed by the European Parliament
The European Parliament has passed the Corporate Sustainability Reporting Directive (“CSRD”). CSRD replaces the Non-Financial Reporting Directive (“NFRD”), and introduces higher requirements of more detailed reporting, and a mandatory EU sustainability reporting standard.
ComplianceCSRDSustainabilityOther updates
The NIS2 Directive now applies to designated IT suppliers to financial companies as appointed by the Danish FSA
As of today, the NIS-2 Directive (“NIS2”) applies to the most important IT suppliers to the financial sector.
DORANIS2National versions of guidelines on funds’ names now published
On 21 August 2024, the European Securities and Markets Authority (“ESMA”) published their guidelines on funds’ names (the “Guidelines”) in versions translated into all the official EU-languages.
ESMASustainabilityRegistration of “sustainability auditors” is now possible
On 1 June 2024, the new rules on requirements to companies’ sustainability reporting (entailed by CSRD) entered into force.
CSRDSustainabilityMeasures to support corporate sustainability reporting
In July, the European Securities and Markets Authority (“ESMA”) published measures to support corporate sustainability reporting.
CSRDESMAESRSSustainabilityESMA opinion on sustainable investments: Facilitating the investor journey
On 24 July 2024, the European Securities and Markets Authority (“ESMA”) published an opinion: “Sustainable investments: Facilitating the investor journey – a holistic vision for the long term” setting out ESMA’s long-term vision on the functioning of the Sustainable Finance Framework.
ESMASustainabilityThematic review of pension funds subject to SFDR article 8
The Danish Financial Supervisory Authority initiated an inspection of three pension funds’ disclosing pursuant to SFDR article 8 in November 2023.
ComplianceDisclosure RequirementsSustainability