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Eumedion: independence is key in possible European sustainability reporting standard setting process

Eumedion: independence is key in possible European sustainability reporting standard setting processNews · 07-01-2021

If the European Commission decides to create a European standard setter for sustainability reporting, then a non-politicised, independent process for developing such standards is key. Eumedion underlines the importance of an independent standard-setting process in its response to the preliminary proposals of the chairman of the board of the European Financial Reporting Group (EFRAG) regarding changes to the governance and financing of EFRAG. In June 2020, the European Commission invited EFRAG Chair Jean-Paul Gauzès to make recommendations on this matter if EFRAG were entrusted with the development of possible EU non-financial reporting standards. The European Commission will probably take a decision on this topic in March. 

In its response, Eumedion writes that the future members of the so-called European Non-Financial Reporting Board should be selected on the basis of professional competence, relevant experience, track record, professional background and diversity instead of a specific number of representatives from the relevant stakeholder groups. Eumedion also endorses the importance of an open and transparent non-financial reporting standard-setting process, including a consultation period of at least three months on proposed non-financial reporting standards.


Eumedion calls on the IFRS Foundation to expand its mission to set global standards for non-financial reporting

Eumedion calls on the IFRS Foundation to expand its mission to set global standards for non-financial reportingNews · 06-07-2020

The position paper ‘Towards a global, investor focused standard setter for corporate non-financial reporting’ that Eumedion published today, calls on the IFRS Foundation (‘Foundation’) to expand its mission. The Foundation should establish a separate standard setting board for non-financial reporting, next to the existing International Accounting Standards Board for financial reporting. The Position Paper concludes an extensive consultation following the publication of Eumedion’s Green Paper ‘Towards a global standard setter for non-financial reporting’ published on 30 October 2019 (‘Green Paper’).

The Green Paper provided a sound starting point for a broad discussion with stakeholders. Nine respondents provided us with written feedback. The subsequent evaluation of all the input received, also provided a firm basis for the other stances in the position paper. Most notably that investors struggle to assess how a company creates long-term value and how a company lives up to the valid needs of society where non-financial performance matters; that enforceable and consistent international standards are needed to ensure that non-financial reporting is faithfully represented; and that the auditor should provide more assurance on the management report: reasonable assurance on certain non-financial key performance indicators, and limited assurance on the entire management report. Eumedion publised a feedback statement on 24 July.

The position paper further acknowledges the EU’s strong commitment to a sustainable future. Eumedion would welcome a leadership role of the EU that clearly recognises the global nature of the challenges faced; the need for, ultimately, global reporting standards; and the necessity of a governance structure of the standard setter that fosters international buy-in from jurisdictions whose commitment to a sustainable future is similar to the EU’s.

In the above light, Eumedion is pleased that the EC Commissioner Mr. Dombrovskis recently reiterated his stance that ‘… non-financial reporting standards would be open, transparent and inclusive, as we want to avoid fragmentation of global capital markets’. Eumedion remains confident that the IFRS Foundation involvement herein will remain part of the discussion on how to realise this vision.

We are also pleased to learn from the minutes of the IFRS Foundation Trustees & Due Process Oversight Committee as published last Friday, that the Trustees decided, as part of a strategic review, that a consultation paper will be published following ‘the increasing demand for global standards that provide comparable, decision-useful and auditable information to investors and other interested stakeholders’.


EFRAG PTF NFRS Outreach Event - Financial Institutions Focus

EFRAG PTF NFRS Outreach Event - Financial Institutions FocusAgenda · 18-01-2021

The EFRAG Project Task Force on preparatory work for the elaboration of possible EU non-financial reporting standards (PTF-NFRS) organises an online outreach event for collecting views of stakeholders from financial institutions on tentantive proposals of the PTF-NFRS. Click here for more information and registration.