ACCA calls on EFRAG to maximise alignment

The Association of Chartered Certified Accountants (ACCA) has called for a global approach to the development of sustainability disclosure standards. This comes as ACCA said that it has “consistently advocated” for a global approach to the development of sustainability disclosure standards in their response to exposure drafts (EDs) on European Reporting Standards (ESRS). In addition, ACCA said it “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. As a result, ACCA is calling on EFRAG (European Financial Reporting Advisory Group) to maximise alignment between the ESRS and the ISSB global baseline. 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. The association is concerned about the quantity of disclosures that are required in the draft ESRS, which 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. Furthermore, this will reportedly impact the companies in the value chain who may be called on to supply information. Many of these are thought to be SMEs who may have limited resources to do so. Yen-Pei Chen, senior manager for Corporate Reporting at ACCA, said: “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.” She added: “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.”

ACCA calls on EFRAG to maximise alignment

ACCA is encouraging the European Commission and EFRAG to consider reporting in accordance with ISSB standards

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