EFRAG publishes drafts of two guidance documents

The Corporate Sustainability Reporting Directive (CSRD) adopted in December 2022 obliges certain companies and groups to include a sustainability report in their (consolidated) management report. This must be prepared in accordance with the European Sustainability Reporting Standards (ESRS) adopted by the EU Commission in July 2023 and published in the Official Journal of the EU on 22 December 20203 (we reported on this in Express Accounting News 25/2023 and Express Accounting News 50/2023).

To support users in implementing the ESRS for the first time, the European Commission asked the European Financial Reporting Advisory Group (EFRAG) to develop application guidelines for carrying out the materiality analysis and for including the value chain.

On 22 December 2023, EFRAG published the drafts of these guidelines for public consultation. In its role as technical advisor to the EU Commission, EFRAG can only issue non-binding guidance and cannot develop concepts or requirements that go beyond the content of the ESRS. The published drafts for the guidance documents and the list of ESRS data points are merely intended to illustrate the ESRS and facilitate practical implementation.

The draft guidance on materiality analysis (Draft EFRAG IG 1) includes explanations and frequently asked questions and their answers in the following areas: 

• explanation of the concept of dual materiality,
• explanation and exemplary presentation of the materiality analysis process and
• role and involvement of stakeholders in the materiality analysis process.

The draft guide to the value chain (Draft EFRAG IG 2) deals with the following areas, among others, in the form of explanations and frequently asked questions and their answers: 

• definition of the value chain,
• relevance of impacts, risks and opportunities from the upstream and downstream value chain for reporting, and
• the process of data collection in relation to the value chain.

The draft list of ESRS data points in Excel format (Draft EFRAG IG 3) contains the complete list of detailed requirements from the respective standards with the disclosure requirements contained therein and the associated application requirements. EFRAG has published supplementary explanatory notes together with the list.  

A thirty-day consultation period (neutralized by the Christmas holidays) was granted for the draft application aids, which ends on 2 February 2024. Feedback is submitted using the forms provided for this purpose, which must be completed online.

The drafts and feedback forms are available on the EFRAG website.