EFRAG and CSRD – Why is EFRAG’s Involvement Important?
EFRAG, the CSRD advisory body for the European Council has been entrusted with a pivotal role in developing the Corporate Sustainability Reporting Directive by drafting the ESRS sustainability reporting standards.
EFRAG, the European Financial Reporting Advisory Group, provides expert support and advice to the European Council on financial reporting matters. Established in 2001, EFRAG has consistently served the public interest in Europe by advocating for transparent corporate reporting practices. The European Council chose EFRAG as an advisor for the CSRD due to its experience and technical expertise in financial reporting.
EFRAG and the CSRD Reporting
EFRAG supports developing and implementing the Corporate Sustainability Reporting Directive (CSRD) adopted by the European Council. The CSRD mandates disclosure standards for companies and aims to standardise ESG (Environmental, Social, and Governance) aspects in corporate sustainability reporting. This directive is a significant step forward from the previous Non-Financial Reporting Directive (NFRD), expanding the scope and depth of sustainability reporting requirements.
The CSRD ensures that companies provide consistent, comparable, and reliable sustainability information. This is crucial for investors, policymakers, and other stakeholders who rely on this information to make informed decisions.
EFRAG and the CSRD Implementation Guides
In addition to supporting the CSRD, EFRAG has been developing implementation guides, ESRS IG’s, for the directive. As of summer 2024, the first three documents have been finalised. The implementation guides provide concrete guidance to companies implementing the CSRD. These guides cover various aspects of sustainability reporting, including data collection, reporting methodologies, and best practices for ensuring accuracy and completeness.
The Importance of EFRAG’s Role
EFRAG’s role in developing and implementing the CSRD is vital for several reasons. EFRAG ensures that the ESRS reporting standards are developed through a transparent and inclusive process involving various stakeholders. This helps build consensus and ensure that the standards are robust and widely accepted.
EFRAG’s technical expertise and experience in financial reporting provide a solid foundation for developing high-quality sustainability reporting standards. This expertise is crucial for addressing sustainability issues’ complex and evolving nature, ensuring that the standards remain relevant and effective over time.
Power of digitalisation for compliant CSRD Reporting
CSRD reporting mandates a digital approach from the beginning, rendering manual efforts obsolete. Compliance with CSRD will require electronically tagged information and submission to the ESAP via the National Contact Point. ESAP is set to be operational in July 2027. Achieving CSRD requirements without specialised software is impossible. Enter Ecobio Manager: Your solution for seamless electronic tagging and ESAP delivery.
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