EFRAG publishes third and consolidated set of explanatory notes

On 30 May 2024, the European Financial Reporting Advisory Group (EFRAG) published a third set of answers to 44 questions submitted by users of the European Sustainability Reporting Standards (ESRS) on its Q&A platform. In addition, the new and previously published questions and answers (as reported in Express Accounting News 5/2024 and 9/2024) have been consolidated into one document. The summary now contains 68 answers to user questions, which have been sorted according to Disclosure Requirements.

The new answers deal with cross-cutting topics and questions from the area of environmental, social and governance standards. Among others, these are

Cross-cutting topics:

• Entity-specific metrics
• Accuracy of the collection of metrics across all group undertakings
• Interaction of objective evidence and stakeholder views
• Scope of the own operation for insurance companies
• Scope of reporting for subsidiaries outside the EU and non-consolidated subsidiaries
• Reporting on metric when no data is available

Environment:

• Consideration of actions and resources when preparing a climate risk analysis
• Determination of greenhouse gas emissions
• Reporting on emission factors
• Reporting on pollution and microplastics

Social:

• Breakdown of data for countries with significant employment
• Requirements for the existence of leave for family-related leave
• Requirements for the conditions for leave for family-related leave

Governance:

• Definition of convictions for violation of anti-corruption and anti-bribery laws
• Definition of indirect political contributions and lobbying activities
• Scope of disclosures on payment practices specifically in relation to small and medium-sized enterprises

Other:

• Explanatory notes to the list of data points included in the ESRS

EFRAG's Q&A platform is intended to provide guidance on technical implementation issues related to the ESRS (Commission Delegated Regulation (EU) 2023/2772), but it is not legally binding and is not legislative in nature. With its answers, EFRAG aims to support preparers in the implementation of the ESRS. Preparers of sustainability reports can submit their questions via an online form.

The consolidated set of explanatory notes is published on the EFRAG website.