Companies and trade bodies give their verdicts on ESRS proposals

Companies and industry bodies have responded in their hundreds to a consultation on the EU’s revised sustainability reporting standards. 

The European Commission’s call for feedback closed on Wednesday, garnering nearly 500 submissions. 

Among them were numerous requests for the European Sustainability Reporting Standards (ESRS) to be more closely tied to other EU legislation, like the Taxonomy and the Packaging and Packaging Waste Regulation. 

Trade association Digital Europe wants closer alignment with existing frameworks like the GHG Protocol, UN Guiding Principles on Business and Human Rights and the International Sustainability Standards Board. 

The European Automobile Manufacturers’ Association called for a “more reasonable deployment pace” – namely through the introduction of a FY2029 deadline.  

A number of organisations demanded stronger rules around the value chain cap, which is being introduced to restrict the amount of information companies can demand from their suppliers. 

“Smaller companies often operate in situations of economic dependency, which may limit their ability to refuse requests, even where these formally exceed the cap,” argued IVSH, Germany’s association for cutlery and household goods. 

As a result, it wants the Commission to set up an anonymous platform for small and mid-cap companies to report firms that make unreasonable requests. 

TEKNIQ, the Danish trade body for electricity, plumbing and metal, agreed with the idea of introducing enforcement mechanisms for big companies and banks that don’t “respect” the value chain cap, and the German Farmers’ Association insisted smaller companies should be compensated for any information they’re asked to provide. 

Meanwhile, the Confederation of Danish Industry said the ESRS shouldn’t force companies to follow the ‘E, S, G’ structure, and should instead let them choose the most sensible approach for their specific business. 

Many individual companies also responded to the consultation. 

Exxon said it was pleased with plans to remove data points on microplastics, but wanted cutbacks to Substances of Concern requirements too.

The oil major concluded that “the draft as a whole does not yet fully deliver on the Omnibus I Simplification mandate, as several aspects continue to create unnecessary operational uncertainty, legal risk, and implementation burden beyond what is required for decision useful sustainability reporting”. 

IKEA franchise Ingka Group said the Commission should focus on “encouraging non-EU jurisdictions to accept CSRD-compliant reporting as equivalent to locally mandated standards”.

“Automatic acceptance of group-level CSRD reporting would significantly reduce the burden for EU businesses with subsidiaries subject to non-EU reporting regimes that typically require a lower level of disclosure,” it noted.  

Nokia proposed the inclusion of “a new application requirement in ESRS 1 to give effect to the objective of interoperability with global sustainability reporting standards by publishing a reconciliation table mapping the disclosure requirements of standards to the corresponding requirements of the IFRS sustainability disclosure standards”. 

Other companies asked for more dramatic overhauls. 

German construction giant Häring Gruppe said Europe should approach sustainability reporting in the same way as speed limits. 

“Nobody has to document the whole day how fast it has been,” it wrote. 

“Rather, what matters is that, in the case of specific infringements, checks are carried out and, where appropriate, penalties imposed.”

It said this more trust-based approach was favourable, “rather than an ever-increasing full-documentation logic”.