French firms allocate 8% of total audit fees to CSRD assurance, finds regulator
AMF publishes details on French reporting, while ESMA and Frank Bold flag ‘boiler plate’ reporting on DMAs.
The average cost of assuring mandatory sustainability reports in France is 8% of overall audit fees, according to the country’s financial watchdog, Autorité des marchés financiers (AMF).
An evaluation of 91 French companies covered by the EU Corporate Sustainability Reporting Directive found the price of assurance to be between 1% and 25%.
It’s a much lower figure than that suggested by Dutch corporate governance body Eumedion this summer.
It found “an unexpectedly large” increase of 19% in assurance costs among domestic firms complying with CSRD.
Another report published this week by the Sustainability Reporting Navigator revealed that 90% of CSRD assurance had so far been provided by the ‘Big Four’ accountants: EY, PwC, KPMG and Deloitte.
It found that just 1% of reports had a red flag raised about their content by auditors.
Meanwhile, the European Securities and Markets Authority (ESMA) and non-profit law firm Frank Bold both raised the alarm this week over ‘boiler plate’ CSRD disclosures – especially when it came to companies’ double materiality assessments (DMA).
ESMA published its latest enforcement priorities for corporate reporting on Tuesday.
When it came to materiality, the supervisor warned that even when firms provided detailed accounts of their CSRD methodologies and processes, the “resulting disclosures were in some cases boilerplate”.
This included companies simply reproducing concepts set out in the European Sustainability Reporting Standards or using the “generic approach” suggested in implementation guidance from EFRAG.
“Insufficient insight was sometimes provided on how individual issuers had adapted these criteria and steps to their facts and circumstances,” ESMA noted.
Frank Bold made similar observations in analysis of 100 CSRD reports, highlighting a reliance on “generic templates” for double materiality assessments.
“This practice tends to obscure company-specific insights and limits the informational value of disclosures,” the law firm wrote.
Real Economy Progress has just announced the winner of the Best Double Materiality Assessment award in this year’s CSRD Awards.