Mixed signals? Investors back ‘essential’ corporate disclosure law but firms say reports are met with silence

80+ financial institutions warn against EU omnibus, but Wave One companies reveal investors haven’t engaged on CSRD reports

More than 80 institutional investors have backed a statement urging the EU to preserve the heart of its sustainability rules on Tuesday.

The letter, which was also signed by a raft of companies and non-profits, stressed the competitive benefits of the Corporate Sustainability Reporting Directive (CSRD) and said it enabled businesses to better communicate sustainability issues “to investors and other financial stakeholders”. 

Despite this public show of support, though, several companies in the first wave of the regulation have been left frustrated by the lack of engagement from investors on their inaugural mandatory disclosures.   

The CSRD was introduced in part to meet financial institutions’ demands for more reliable corporate sustainability data. 

But one Chief Sustainability Officer complained that the lack of response to its debut report made it difficult to answer internal questions about its value.  

“Our Board has asked us what the impact is and who is really using this information,” said the unidentified CSO, who was interviewed for a report by CSR Europe. 

“We haven’t received any questions from investors or NGOs, [so] it’s a difficult question to answer.”

Another sustainability head shared a similar experience with Real Economy Progress this week.   

“In the Spring, I thought it would take some time to digest the reports before feedback was given, but so far I have not heard anything: not good, nor bad,” he said. 

A third told REP he had received “general praise” but not “any detailed feedback” on the company’s CSRD report. 

The sustainable finance exec, who used to work at a large European pension fund but now works at a Wave One firm, suggested this was because CSRD was “too complex for many investors”. 

Last month, the European Commission’s advisory group, EFRAG, said it planned to halve the data points underpinning CSRD to make it easier for preparers and users. 

It today announced it would extend a public consultation on those changes, due later this month, from 45 days to 60 days, to give the market more time to provide feedback.

Aleksandra Palinska, the head of the EU’s sustainable investment forum, Eurosif, pointed out that the lack of engagement “may be reflective of the short time since [their] publication” or that “some [investors] are more interested in sustainability-related disclosures than others”.

Eurosif was one of the conveners of this week’s investor statement, and Palinska said there had so far been “positive overall” feedback from its members on the first CSRD reports. 

However, she added that it was “still too early to assess their impact or usefulness for investors”.