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ACCA calls for maximum alignment on sustainability reporting standards

Date

16 Aug 2022

Sections

Euro & Finance

10 August 2022

ACCA calling on EFRAG to maximise alignment

ACCA (the Association of Chartered Certified Accountants) is calling for a global approach to the development of sustainability disclosure standards.

Responding to exposure drafts (EDs) on European Sustainability Reporting Standards (ESRS), ACCA says that it has consistently advocated for a global approach to the development of sustainability disclosure standards.

ACCA fully supports the role of the ISSB (International Sustainability Standards Board) in setting a consistent and comparable global baseline to sustainability reporting around the world.

However, the global accountancy body recognises that Europe’s Green Deal may necessitate some further requirements. ACCA is calling on EFRAG (European Financial Reporting Advisory Group) to maximise alignment between the ESRS and the ISSB global baseline.

Yen-Pei Chen, senior manager for Corporate Reporting, ACCA, says: ‘Maximum alignment is of paramount importance for investors and other stakeholders to have easily comparable information on sustainability-related issues.

‘The cost to companies of sustainability-related reporting and assurance is equally important. Especially for businesses that need to report under both ESRS and ISSB standards.’

Businesses that need to report under both standards include European businesses operating internationally, and non-EU businesses with branches or subsidiaries within scope of the Corporate Sustainability Reporting Directive (CSRD).

To promote global alignment and facilitate cross-border trade, ACCA is encouraging the European Commission and EFRAG to consider reporting in accordance with ISSB standards as equivalent, when these are supplemented with comparable impact reporting standards such as the GRI Standards.

ACCA is concerned about the quantity of disclosures that are required in the draft ESRS. This looks set to prove difficult for the entities within scope considering the vast amount of information to collect alongside changes to systems required. Also it may not lead to more relevant reporting.

This will also impact the companies in the value chain who may be called on to supply information. Many of these will be SMEs who may have limited resources to do so.

Yen-Pei concluded: ‘There is significant scope for greater alignment between the two sets of standards and this could be achieved in finalising the ESRS. Those affecting the determination of materiality are of particular importance. We urge EFRAG to provide clearer definition and guidance on double materiality: specifically on how impact materiality should be assessed in practice and ensure that the financial materiality is aligned with the ISSB definition.’

Notes to editors

ACCA has responded in the form of an open letter comment.

Details can be found in Accountancy Europe’s response to the EDs.

ACCA is a member of Accountancy Europe and has been working with Accountancy Europe and its other member bodies to provide a common response. 

 

Ends

For media enquiries, contact:

ACCA News Room

E: newsroom@accaglobal.com

Twitter: @ACCANews

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About ACCA

ACCA (the Association of Chartered Certified Accountants) is the global body for professional accountants.

 We’re a thriving global community of 240,000 members and 541,000 future members based in 178countries and regions, who work across a wide range of sectors and industries. We uphold the highest professional and ethical values.

We offer everyone everywhere the opportunity to experience a rewarding career in accountancy, finance and management. Our qualifications and learning opportunities develop strategic business leaders, forward-thinking professionals with the financial, business and digital expertise essential for the creation of sustainable organisations and flourishing societies.

Since 1904, being a force for public good has been embedded in our purpose. In December 2020, we made commitments to the UN Sustainable Development Goals which we are measuring and will report on in our annual integrated report.

We believe that accountancy is a cornerstone profession of society and is vital helping economies, organisations and individuals to grow and prosper. It does this by creating robust trusted financial and business management, combating corruption, ensuring organisations are managed ethically, driving sustainability, and providing rewarding career opportunities.

And through our cutting-edge research, we lead the profession by answering today’s questions and preparing for the future. We’re a not-for-profit organisation. Find out more at accaglobal.com

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