“We’ll never have full convergence”: EFRAG expert calls for honesty on aligning reporting standards
Liad Ortar says full convergence between ESRS and ISSB is not possible or desirable
EFRAG’s technical manager has called for honesty when it comes to aligning sustainability disclosure standards, describing full convergence as neither possible nor desirable.
Speaking about current efforts to bring the European Sustainability Reporting Standards (ESRS) closer in line with international equivalents, Liad Ortar said “we do need to be honest with ourselves that we’ll never have full convergence, we will always have differences”.
“I think, like diversity, it’s a good thing to have,” he added.
The comments were made during a webinar hosted by consultancy Position Green on Thursday, when Ortar was asked how EFRAG – which steers the development of the ESRS – was working to align them with the International Sustainability Standards Board.
EFRAG will launch a consultation on its broader efforts to streamline the ESRS, along with new exposure drafts, “in about a month”, he told attendees.
In the meantime, the group is providing a technical update to the European Commission next Friday.
Ortar said one of the themes of feedback from stakeholders so far was the “diversity in how auditors interpreted their role” in helping firms comply with the EU’s Corporate Sustainability Reporting Directive.
In some cases, he said, auditors had even opined on which images companies should include in their sustainability statements.
Speaking alongside Ortar, Louise Krüger Kofoed, a sustainability director at Danish pharmaceutical firm ALK, described the assurance requirements attached to CSRD as the “biggest challenge” and “a steep, steep learning curve for all of us – both on the company side, but also the auditor side”.
She said auditors often train their financial experts in sustainability, “which is not exactly the same kind of audit”.
“I think that caused challenges along the way, and made it a quite intense task,” she told attendees.
The EU is expected to publish guidance for auditors on CSRD assurance by the end of the year.