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Eumedion welcomes the European Commission’s proposal for the European Sustainability Reporting Standards (ESRS). In its comment letter, published today, Eumedion points out a few areas that need further improvement, and which are also addressed by the joint statement, issued today by Eurosif, UNPRI, UNEP, IIGCC and EFAMA, and co-signed by Eumedion.

One of Eumedion’s key concerns is the alignment with the Sustainable Finance Disclosure Regulation (SFDR), which unintentionally hampers the quality and decision-usefulness of both the ESRS and the SFDR disclosures. Eumedion points out that a coherent joint evaluation of the disclosure requirements under both frameworks is crucial to address the fundamental drivers of these issues. Also, the so-called interoperability between the ESRS and the international sustainability reporting standards recently issued by the IFRS Foundation requires on-going attention by the European Commission.

Additionally, Eumedion finds that a brief explanation of the conclusions of the materiality assessment should be made mandatory. This contributes to stakeholders understanding what criteria and reasoning was used to construct the materiality assessment, which ultimately determines which topics are, and which topics are not, addressed in the sustainability statements. The climate and own workforce standard should, however, be exempt from the materiality assessment and be mandatory for all companies, due to the societal urgency or the basic information needs served by these standards. Finally, Eumedion points out deficiencies in the area of ‘governance’ factors, which are insufficiently covered not only in the ESRS, but also in the broader European sustainable finance initiatives.