EU says national governments must help reduce CSRD burden
Outgoing finance commissioner urges ministers to ensure supervisors and assurers aren’t heavy-handed when enforcing the rules
The EU’s outgoing head of finance told governments to help reduce the burden of CSRD, in part by encouraging assurers and supervisors not to be too strict about companies’ output in the first few years.
In a letter made public this week, Mairead McGuinness, Commissioner for Financial Services, Financial Stability and the Capital Markets Union, acknowledged that applying the new sustainability reporting standards was “a challenge for companies” – particularly smaller ones, and those with no experience of disclosing on environmental and social topics.
She outlined a series of steps the Commission has taken to ease the burden, including raising the thresholds for how much money a firm has to make to be covered by the rules, postponing sectoral guidelines, and exploring how it can help harness technologies that will make the process easier.
But, McGuinness continued: “I believe it is important that Member States also take practical steps to minimise the burden on companies associated with the new reporting requirements”.
The letter is addressed to Hungary’s economic minister, Marton Nagy, who chairs the EU Competitiveness Council – a group of ministers responsible for trade, economy and industry in the region.
It was sent in September, but only published on the Commission website on Wednesday.
McGuinness goes on to outline a number of measures that national governments should consider, including making sure assurers and enforcers aren’t too heavy handed in the first few years of disclosure.
She suggested ministers should be “engaging with supervisory authorities and assurance providers to stress the need for a proportionate approach, recognising that there will be a learning curve and the reporting will improve over time as companies gain experience”.
Last week, Real Economy Progress reported on the Commission’s current efforts to paint CSRD as a law that can be adopted in a pragmatic way, as it continues to come under fire from national politicians and trade bodies for being impractical and overly burdensome.
The letter also suggested that governments should consider making the most of a support mechanism set up to provide bespoke national technical assistance to Member States seeking to help companies with the disclosure regime.
The deadline for requests for help under the mechanism, known as the Technical Support Instrument, is the end of October.
“I would be grateful if you could share the content of this letter with the members of the Competitiveness Council,” McGuinness concluded.
McGuinness is expected to be replaced in coming weeks by a new Commissioner for finance, former Portuguese finance minister Maria Luís Albuquerque.