Comments on the ongoing revision of the EU ESG reporting guidelines
EU Commission starts a targeted consultation seeking specific input from stakeholders on the proposed revision of the Non-Binding Guidelines accompanying the EU Non-Financial Reporting Directive.In the context of its ambitious Sustainable Finance Action Plan, the EU Commission intends to update the Non-Binding Guidelines accompanying the EU Non-Financial Reporting Directive. The focus is on climate related disclosures. Central drivers of the revision are the TCFD (Task Force on Climate-related Financial Disclosures) recommendations and the proposed EU taxonomy on sustainable economic activities. As part of this update process, the Commission is currently conducting a targeted consultation seeking specific input from stakeholders on the proposed revision until the 20th of March 2019. For years, BSD has closely followed the dynamic and interesting ESG policy development at EU level. As we consider stakeholder engagement an essential part of sustainability management, Thomas Petruschke (Managing Director BSD Germany) had a closer look at the proposed guideline update and provided his feedback to the EU Commission. In a nutshell:
The proposed update is an important contribution to mainstreaming climate related risk and opportunity analysis as well as reporting.
The impact and acceptance amongst users of the proposed guidelines might be increased by reviewing the conciseness, consistency, preciseness and cost/benefits of the disclosures compiled in the consultation draft.
Introducing model disclosures for the highly complex risk reporting requirements could clarify the expectations regarding detail and scope.
Linking product-service indicators with the proposed EU taxonomy on sustainable economic activities and sustainable-finance indicators with the proposed EU green bond standard is very innovative and would allow a performance reporting that is in line with other EU policy discussions e.g.: on thresholds and appropriate measures/technologies/business models. This will likely increase the relevance of non-financial reporting in general.