In recent days there have been a number of updates of relevance to those companies that fall within scope of the sustainability reporting obligations under the Corporate Sustainability Reporting Directive. We have set out a brief overview of each of these updates below.
1. Proposed amendments to the Accounting Directive adopted by the European Commission
Below is a table setting out the details of the new and existing thresholds for large, medium, small and micro companies. While this delegated act is not in force until published in the Official Journal of the EU, it will:
(i) require EU member states to implement legislation applying these provisions for financial years beginning on or after 1 January 2024
(ii) allow member states to provide companies with the ability to apply these provisions for financial years beginning on or after 1 January 2023
Type of undertaking
Balance sheet total
2. Adoption of sector specific and non-EU European Sustainability Reporting Standards to be delayed
On 18 October 2023, the European Parliament voted on the objection that had been raised to the sector agnostic ESRS adopted by the European Commission in July. The rejection of this objection paves the way for these standards to be published before the end of the year.
4. EFRAG prepares 2024 work programme
On 11 October 2023, EFRAG's sustainability reporting board approved their 2024 work programme. Key priorities for EFRAG in 2024 are to finalise measures to support the implementation of the sector agnostic ESRS and to introduce separate standards for SMEs.
EFRAG will issue implementation guidance in 2024 with the drafts relating to the:
(i) materiality assessment
(ii) value chain to be approved by the end of 2023
Other implementation guidance will be worked on in 2024. EFRAG also intends to launch the ESRS implementation Q&A process in the coming weeks which will provide companies the opportunity to seek clarification of specific provisions of the ESRS. On a quarterly basis in 2024 EFRAG intends to publish responses as part of this process.
EFRAG has indicated that in December 2023 (or at the beginning of Q1 of 2024), the inventory in XLS of the datapoints deriving from ESRS and consistent with the future draft ESRS XBRL Taxonomy will be issued.
In terms of separate standards for SMEs, EFRAG expects to issue the initial exposure draft of the simplified standards for listed SMEs for public consultation in January 2024. EFRAG is also preparing a voluntary reporting standard for non-listed SMEs. It is anticipated that the exposure draft will be published for consultation in the Q1 of 2024.
As noted in recent EFRAG meetings, sector specific ESRS will likely focus on the oil and gas and financial institutions sectors in 2024. A third sector specific standard and potentially a fourth sector specific standard will also be drafted in 2024, it is not clear yet which other sectors will be prioritised. As non-EU groups will not be required to report until 2029, EFRAG has indicated that the consultation in respect of separate standards will not launched until Q4 of 2024 at the earliest.