This European directive, which came into force very recently, marks an increase in the level of requirements in terms of extra-financial reporting. The EFRAG (European Financial Reporting Advisory Group) has in fact strengthened and harmonised the requirements to which all Member States are subject. The body has established new standards, in the form of a set of European standards on sustainability reporting – known as “ESRS” standards (European Sustainability Reporting Standards).
In accordance with this new regulatory framework, companies must provide detailed datawhich will also be audited by an independent third-party body (OTI). Depending on the subjects identified as priorities for each company and ensuring that the three fields E, S and G are properly covered, this data – quantitative (i.e. numerical indicators) but also qualitative (i.e. descriptive) – may relate to the impact of its activities on natural resources, its capacity to adapt to climate change, its human rights policies, its supplier relationship management, etc.
Focusing on major issues, the objective is to disclose full information, more reliable et comparables between companies and between countries. This will allow citizens, authorities and investors to better assess the extra-financial impacts and risks of a company, in order to prioritize funding towards activities most compatible with the Paris Agreement – namely keeping global warming to +1.5°C.
