The National Council of Certified Public Accountants and Accounting Experts (CNDCEC) published on July 13, 2023, the translations of five out of the ten modules that present and elaborate on the draft European Sustainability Reporting Standards (ESRS) principles developed by the European Financial Reporting Advisory Group (EFRAG) on behalf of the European Commission.
The ESRS principles define the rules that companies are required to comply with when reporting on sustainability impacts, risks, and opportunities, as established by the European Directive on Corporate Sustainability Reporting (Directive (EU) 2022/2464, also known as CSRD).
The translated principles are as follows:
- ESRS 1: General Requirements
- ESRS 2: General Disclosures
- ESRS E1: Climate Change
- ESRS E2: Pollution
- ESRS E3: Water and Marine Resources
The documentation provided by EFRAG is structured into ten modules, each of which provides a concise presentation and a training session. Additionally, explanatory videos prepared by members of EFRAG’s Technical Expert Group on sustainability reporting are available.
According to the CSRD Directive, the ESRS principles aim to create a new sustainability reporting system in Europe. Companies subject to the regulation will be required to prepare a sustainability report covering various aspects, including business strategies, business models, governance, assessments of the relevance of sustainability impacts, risks, and opportunities, as well as policies, objectives, action plans, and performance.
The process of defining the ESRS standards involved the introduction of the draft of the first set of principles by EFRAG in November 2022. This set includes two cross-cutting principles applicable to all companies: ESRS 1, which establishes general requirements irrespective of the subject matter, and ESRS 2, which provides general information to be communicated.
Regarding the thematic principles, they include:
- Five environmental principles addressing critical and specific topics such as climate change, pollution, water and marine resources, biodiversity and ecosystems, as well as resource utilization and the concept of a circular economy.
- Four social principles focusing on the internal workforce, workers in the value chain, consumers and end-users, as well as relevant communities.
- A principle on corporate governance and business conduct.
The National Council also announced that translations of the subsequent modules will soon be made available on its website.
The CNDCEC’s publication is further evidence of how accountants are called upon to study the new sustainability principles to become the protagonists of the new reporting approach, no longer limited to economic, financial, and asset-related aspects.