The EU is very keen on climate change policies because they offer huge opportunities to apply extra taxes on people, goods and services. Now it looks like there are moves to make companies report on meeting sustainability standards and make this a much more important part of corporate governance. For big insurers this could impact on who they cover, and how they justify offering that insurance cover. Then there are the questions over long term investments of pension funds. If anyone thinks that the EU won’t interfere in how a company makes key decisions then you only have to look at the vaccine fiasco to see what may happen in the future, all in the name of `the greater good.’
Here’s the press info;
Recommendations for the creation of European sustainability reporting standards would require large companies in the EU to disclose their external impacts in a way that meets the needs of multiple stakeholders while building on the standard setting of global bodies, such as GRI.
A report published on Monday by the European Financial Reporting Advisory Group (EFRAG) provides the European Commission with recommendations on establishing an EU sustainability reporting framework. A second report proposes reforms to EFRAG’s governance structure in order to take on a sustainability standard setting role.
The EFRAG recommendations, many of which closely align with the GRI Standards, includes that the new sustainability standards should:
- Build on and contribute to the global convergence of public and private sustainability reporting initiatives
- Position sustainability reporting on an equal footing with financial reporting, introducing connectivity between these two pillars to improve corporate reporting as a whole
- Adhere to ‘double materiality’, requiring both ‘impact materiality’ (external impacts of the company and its value chain) and ‘financial materiality’ (sustainability matters that financially affect the reporting entity)
- Meet the needs of an inclusive range of stakeholders, with standard setting that is conducted in the public interest and aligns with global goals, such as the SDGs and Paris Agreement
Eric Hespenheide, Chairman of GRI, said:
“The recommendations put forward for EU sustainability standards, if realized, would significantly advance sustainability reporting in Europe, by requiring the double materiality and multi-stakeholder focus that is necessary to ensure companies are accountable for their impacts.
We welcome the intent to work with existing sustainability reporting initiatives and the recognition that sustainability and financial reporting are of equal importance. GRI looks forward to working with the Commission and EFRAG, contributing our expertise and unique perspective from more than 20 years as the global pioneer of sustainability reporting.”
Judy Kuszewski, Chair of the Global Sustainability Standards Board (GSSB), the independent body responsible for setting the GRI Standards, added:
The GRI Standards are developed through a multi-stakeholder process, founded in the public interest and enable companies to provide a full and balanced picture of their sustainability impacts. As such there is close alignment between the proposed EU sustainability standards and those provided by GRI.
The GSSB is prepared to have dialogue with EFRAG on how we can support them in developing an EU sustainability standard setting framework that improves the consistency and comparability of disclosed information, while raising the bar for corporate transparency in Europe and beyond.”