Sustainability reporting standards interim draft

Project status: Active
Current project stage: Communication
Project responsible: Saskia Slomp, Chiara Del Prete

PTF-ESRS: On track to meet ambitious timeline, five months into the drafting of European sustainability reporting standards (ESRS)

Following the request from the European Commission to start technical work building on the recommendations of the PTF-NFRS, EFRAG is making substantial progress in developing draft European sustainability reporting standards, while reforming its governance structure.

Project introduction

On 21 April 2021 the European Commission adopted a legislative proposal for a Corporate Sustainability Reporting Directive (CSRD) which would oblige companies under scope to report in compliance with European sustainability reporting standards adopte​d by the European Commission as delegated acts.​​​

​At the request of the European Commission and in parallel to the elaboration and adoption of the legislative proposal, EFRAG has already carried out extensive work on key governance and standard-setting matters related to sustainability reporting. Two reports published on 8 March 2021 provide a full account of the proposals made:

​​​​​​Under the proposed CSRD, EFRAG would develop draft standards, using proper due pro​​cess, public oversight and transparency, and ​with the expertise of relevant stakeholders.

The timeline contained in the proposal assumes the elaboration of draft sustainability r​eporting standards in parallel to the legislative process of the proposed CSRD. To meet this timeline, Commissioner McGuinness, in a letter dated 12 May 2021​, has requested EFRAG to:​

  1. ​reform its governance following the recommendations by Jean-Paul Gauzès in his report which were fully supported by Commissioner McGuinness, and
  2. put in place interim working methods to start the technical work immediately building on the membership, leadership, expertise and recommendations of the PTF-NFRS.

As a consequence, the PTF-NFRS established in September 2020​, is now called the Project Task Force on European sustainability reporting standards (PTF-ESRS). The PTF-ESRS has been invited to start elaborating standards in project mode in view of passing responsibility to the EFRAG sustainability reporting bodies as soon as they have been established following the planned governance reforms.

Kicking-off the technical work under robust organisation and due process: Successfu​​l launch of the PTF-ESRS

In this context most of the 35 PTF-NFRS members, originating from 13 member states and from all relevant backgrounds, have expressed their willingness, availability and enthusiasm to contribute to this new crucial phase as PTF-ESRS members. A few adjustments have been organised to fill the gaps. Public authorities have also been invited to participate and have all expressed their willingness to contribute.

For the composition of the PTF-ESRS see here​​. The PTF-ESRS benefits from the support of a secretariat generously provided by constituents and stakeholders, together with the EFRAG Secretariat.​

The plenary kick-off meeting took place on 9 June 2021, and established the bases for a swift start:

  • Objectives and milestones, in alignment with the CSRD timeline and the EFRAG governance reform timetable;
  • Organisation in clusters, reflecting the target architecture proposed in the PTF- NFRS report;
  • Allocation of tasks and responsibilities, consensus building and rules of engagement;
  • Due process procedures (under public consultation) and templates.

​​To support the PTF-ESRS a robust Secretariat has been set up in order to provide technical expertise, project management and drafting input. At this stage the Se​cretariat benefits from the contribution of a full time equivalent of around 20 professionals. Additional competencies are welcome and EFRAG has published a call for candidates for contribution in kind positions as well as for some compensated positions.

Technical work by the PTF-ESRS is well under way, organised in clusters. These clusters are currently scoping, researching, documenting and drafting the very first version of the standards, aiming to have preliminary pre-exposure draft versions ready for a first batch of standards by mid-November.

Expert Working Groups

On 25 August 2021 EFRAG launched a call for candidates for setting up Expert Working Groups (EWGs) with expertise and experience on sustainability matters, to provide input for the development of draft European sustainability reporting standards. A very large number of high quality applications for membership of the EWGs were received that were carefully considered and analysed under the supervision of the EFRAG Board President Jean Paul Gauzes. During the selection process strong emphasis was given to identifying candidates with high level of expertise and experience on the specific areas and topics listed in the call for candidates whilst respecting an optimal balance for professional background, nationality and gender.

The composition of the EWGs was publicly announced on 5 November 2021.

The EWGs are expected to review, provide input and, where necessary, contribute to the work of the PTF-ESRS on the basis of the preliminary pre-exposure draft version of the standards to be submitted to them. The preliminary pre-exposure draft version will be further developed to accommodate input from the EWGs, to get to the pre-exposure draft for the next steps of the standard- setting process.

The EWGs were launched with an induction session in December 2021, and material started being shared in January 2022 for input by the relevant EWGs.


​Date ​Agenda ​Papers
​9 June 2021 Agenda ​
5 July 2021 Agenda

​19 July 2021 ​Agenda ​
​31 August 2021 ​Agenda ​
​8 September 2021 Agenda ​
​20 September 2021 ​Agenda ​
​11 October 2021 ​Agenda ​
​18 October 2021 Agenda​ ​
​15 November 2021 ​Agenda ​
​1 December 2021 ​Agenda ​
​6 December 2021 ​Agenda ​
​10 January 2022 ​Agenda ​
​20 January 2022 ​Agenda Batch 1 working papers (cover note, including links to attached documents provided in Appendix 2)
​27 January 2022 Agenda​ ​
​10 February 2022 Agenda​ ​
​18 February 2022 Agenda​ Cover note, Working paper: [Draft] ESRS E2 Pollution, Working paper: [Draft] ESRS E3 Water and marine resources, Working paper: [Draft] ESRS E5 Resource use and circular economy
​25 February 2022 ​Agenda ​Working paper ESRS SEC1 [draft] Sector Classification Standard
​3 March 2022 ​Agenda ESRS P1 on Sustainability Statements, ESRS S1 on Own workforce – General, ESRS S4 on Own workforce – Other work-related rights, ESRS S5 on Workers in the value chain, ESRS S6 on Affected communities, ESRS S7 on End-users / consumers, ESRS E4 on biodiversity and ecosystems
​10 March 2022 ​Agenda ​ESRS S2 Own Workforce-Working Conditions, ESRS S3 Own Workforce-Equal opportunities, ESRS G1 Governance, risk management and internal control, ESRS G3 Business conduct
​16 March 2022 ​Agenda ESRS 1 Cover Note, ​ESRS 1 General Provisions
​21 March 2022 ​Agenda ​
​25 March 2022 ​Agenda ​ESRS G2 Products and services, management and quality of relationships with business partners
​30 March 2022 ​Agenda ​
​8 April 2022 ​Agenda ​
​13 April 2022 ​Agenda ​
​20 April 2022 ​Agenda ​
​21 April 2022 ​Agenda ​
​25 April 2022 ​Agenda ​

Building on and contributing to international convergence

In compliance with the PTF-NFRS proposals and the CSRD proposal, the PTF-ESRS is keen to build on and contribute to international convergence.

Two high-level meetings were organised by EFRAG together with the European Commission with leading international sustainability reporting standard setters and initiatives on 10 December 2020​ and 22 March 2021. Technical discussions have been taking place following those meetings.

Statements of cooperation have so far been signed with the following organisations:

Presentation of EFRAG's work at a European Commission side-event to COP26

On 4 November 2021, EFRAG participated at a European Commission side event to COP26 on EU Sustainability Reporting Standards and the future of sustainability reporting.

Mairead McGuinness, European Commissioner for financial services, financial stability and the Capital Markets Union, introduced the event.

EFRAG's work on EU sustainability reporting standards was presented by the Chair of the PTF-ESRS, Patrick de Cambourg.

PTF-ESRS Chair presentation transcript

PTF-ESRS Chair presentation slides

Recording of the event (registration required to access)

The event considered EFRAG's work in the context of key global initiatives, including the standards of the Global Reporting Initiative, the plans of the IFRS Foundation and its future International Sustainability Standards Board, and the work of the Task Force on Climate-related Financial Disclosures (TCFD).

Participants to the panel discussion moderated by Alain Deckers (Head of Unit for Corporate Reporting, Audit & Credit Rating Agencies, European Commission), were:

  • Rosanna Fusco, Head of Climate Change Strategy and Positioning, Eni, and member of Task Force on Climate-related Financial Disclosures
  • Judy Kuszewski, Chair of the Global Sustainability Standards Board, Global Reporting Initiative
  • Michel Madelain, IFRS Foundation Trustee, Chair of Technical Readiness Working Group

'Climate standard prototype' working paper

During its plenary session on 8 September 2021, the PTF-ESRS received an extensive presentation of a working paper titled 'Climate standard prototype' prepared by its subgroup dedicated to this topic (Cluster 2). The PTF-ESRS welcomed this presentation as a robust basis for future PTF-ESRS discussions and further steps towards a draft standard. This working paper was made publicly available​ for transparency purposes, but is not submitted to public consultation at this stage. The basis for conclusions supporting this working paper​ was subsequently​ made publicly available also.​

In parallel to the work on climate, the PTF-ESRS continues to work on draft standards covering all other sustainability issues referred to in the European Commission's CSRD proposal, which will form part of the set of draft standards to be delivered to the European Commission in mid-2022.

Documents

Project news

25/03/2022 - EFRAG publishes today the last PTF-ESRS Cluster Working Paper

As part of the due process during the project mode EFRAG publishes the last PTF-ESRS Cluster Working Paper: ESRS G2 Products and services, management and quality of relationships with business partners.

18/03/2022 - EFRAG publishes today the next PTF-ESRS Cluster Working Paper

​As part of the due process during the project mode EFRAG publishes the next PTF-ESRS Cluster Working Paper: Working Paper ESRS 1 General Provisions and its cover note.

14/03/2022 - EFRAG publishes today the next set of PTF ESRS cluster working papers

As part of the due process during the project mode EFRAG publishes the next set of PTF ESRS Cluster Working Papers.

Included in this set is the Cluster Working Paper on ESRS S2 Own Workforce-Working Conditions, ESRS S3 Own Workforce- Equal opportunities, ESRS G1 Governance, risk management and internal control, ESRS G3 Business conduct.

03/03/2022 - EFRAG publishes today the next set of PTF ESRS Cluster Working Papers

As part of the due process during the project mode EFRAG publishes the next set of PTF ESRS Cluster Working Papers.

Included in this set is the Cluster Working Paper on ESRS P1 on Sustainability Statements, ESRS S1 on Own workforce – General, ESRS S4 on Own workforce – Other work-related rights, ESRS S5 on Workers in the value chain, ESRS S6 on Affected communities, ESRS S7 on End-users / consumers, ESRS E4 on biodiversity and ecosystems.

25/02/2022 - EFRAG publishes today the next set of PTF ESRS Cluster Working Papers

​As part of the due process during the project mode EFRAG publishes the next set of PTF ESRS Cluster Working Papers.

Included in this set is the Cluster Working Paper on ESRS SEC1 Sector classification standard.

16/11/2021 - PTF-ESRS: On track to meet ambitious timeline, five months into the drafting of European sustainability reporting standards (ESRS)

​Following the request from the European Commission to start technical work building on the recommendations of the PTF-NFRS, EFRAG is making substantial progress in developing draft European sustainability reporting standards, while reforming its governance structure. Read the full status report here.

05/11/2021 - Appointed – Members of the Expert Working Groups to provide input on the drafting of European sustainability reporting standards

​Announcement of the composition of the eleven Expert Working Groups (EWGs) with expertise and experience on sustainability matters, to provide input for the development of draft European sustainability reporting standards. See full press release.

11/10/2021 - EFRAG PTF ESRS Expert Working Groups - Large number of applications received

​EFRAG received an unprecedently large number of applications in response to the call for candidates for the expert working groups to provide input on the drafting of sustainability reporting standards.

24/09/2021 - EFRAG - PTF ESRS Cluster 2: Climate standard prototype - Basis for Conclusions working paper

​Following EFRAG's announcement​ on 8 September 2021, the Basis for Conclusions working paper, supporting the Climate standard prototype working paper​, is now available. ​

09/09/2021 - Deadline approaching - Apply now for the Expert Working Groups to provide input on the drafting of sustainability reporting standards

​High level candidates sought for setting up expert working groups with expertise and experience on sustainability matters, to provide input for the development of draft European sustainability reporting standards. Deadline for applications is 15 September 2021. Read the complete call for candidates here​.

08/09/2021 - EFRAG PTF-ESRS welcomes 'Climate standard prototype' working paper

​EFRAG PTF-ESRS welcomes 'Climate standard prototype' ​working paper.

08/09/2021 - EFRAG and Shift: milestone statement of cooperation

​Pursuing its work towards international sustainability reporting convergence, EFRAG Project Task Force on European sustainability reporting standards (PTF-ESRS) signed a milestone Statement of Cooperation with Shift. Read the detailed press release here.

25/08/2021 - Experts called for working groups to provide input on the drafting of sustainability reporting standards

High level candidates sought for setting up expert working groups with expertise and experience on sustainability matters, to provide input for the development of draft European sustainability reporting standards

08/07/2021 - EFRAG & GRI landmark Statement of Cooperation

​​Working towards international sustainability reporting convergence, EFRAG Project Task Force on European sustainability reporting standards (PTF-ESRS) and GRI sign landmark Statement of Cooperation. Read the detailed press release here.

08/07/2021 - EFRAG invited to contribute immediately to the elaboration of draft EU sustainability reporting standards (ESRS)

​​Committed to the ambitious timeline for a major step in quality sustainability reporting, EFRAG has successfully initiated the elaboration of EU sustainability reporting standards to be submitted to the European Commission. Read the detailed press release.