At the EFRAG Sustainability Reporting Board meeting on 22 March 2023, pushing the sector-specific standards up to one year into the future was on the agenda. The modification has both positive and negative impacts on companies reporting under the CSRD.
On the positive side, the postponement allows companies more time to prepare for the new reporting standards. This extra time can be used to evaluate current reporting practices and make any necessary adjustments to align with the new requirements in the sector-specific standards. It also provides additional time to collect and analyze data to ensure accuracy and completeness of reports. Furthermore, it leaves more time to ensure a solid implementation of the already published ESRS drafts.
However, the postponement may also lead to a lack of clarity and consistency in reporting across industries, making it more challenging for investors and other stakeholders to compare and evaluate companies' ESG reporting performance.
Additionally, the delay may create uncertainty among companies that have already started preparing for the new standards and invested resources in doing so.
It is essential to keep in mind that the CSRD aims to improve ESG reporting and increase transparency across companies. While it may create some unanswered questions on the short-term, the overall goal of the postponement is to ensure that companies provide more comprehensive and reliable ESG information to stakeholders in the future. Therefore, it is crucial to stay up-to-date with any changes to the reporting requirements.
Christian Møllegaard
Partner, ESG Advisory Services
KPMG in Denmark
