EFRAG eyes 66% reduction in European Sustainability Reporting Standards
Increase to advisory group’s planned cuts come as European Commission names EFRAG sustainability candidates
EFRAG has revealed plans to remove two-thirds of data points from the European Sustainability Reporting Standards (ESRS), substantially higher than it estimated last month.
The new figure was quoted in a note discussed at a meeting of its Sustainability Reporting Technical Expert Group (SR TEG) today.
EFRAG will propose halving the number of data points the ESRS currently says companies “shall” disclose, and cutting 277 “may” data points.
“Overall, considering the reduction of both may and shall datapoints, the preliminary counting assessment reveals an overall reduction in datapoints is approx. -66%”, wrote the group.
In its June update, EFRAG predicted a 50% reduction in data points as a result of the revisions.
A public consultation is slated for July 31st.
Meanwhile, the European Commission has nominated Chiara del Prete, Kerstin Lopatta and Adam Pradela as its candidates to become the new chair of EFRAG’s Sustainability Reporting Board (SRB).
Del Prete is an Italian academic who currently chairs the SR TEG. Until March, she also chaired the International Forum of Accounting Standard Setters.
Kerstin Lopatta is SRB’s vice-chair.
She is also an academic at the University of Hamburg, which last week published a joint position paper with business association Deutsche Aktieninstitut on the future of sustainability reporting, arguing that “abrupt and rushed standard-setting leads to technical errors”.
Lopatta has served on several corporate boards, including German telecoms firm Freenet, and provides consultancy services on how to implement the ESRS through a company called Management Alliance.
Management Alliance says its experts, who also include former SRB member Alexander Bassen, “come directly from the engine room of EFRAG”.
Adam Pradela is the chief financial officer for corporate responsibility at German delivery firm DHL.
He’s also a member of the ‘transition implementation group’ of the International Sustainable Standards Board.
The successful candidate will replace inaugural chair Patrick de Cambourg, who has been at the helm of the SRB since 2022.