Comments to sustainability reporting proposals
Tweuus has sent comments to the IFRS Foundation and EFRAG in response to their proposals for sustainability reporting.
The comments can be retrieved below.
Summary
The main points of Tweuus’ reaction to the proposals of the International Sustainability Standards Board (ISSB) are that this ‘standardsetter’ is the least relevant compared to the Securities and Exchange Commission (SEC) and the European Union and that it would be better to stop regulating in the area of sustainability in order to avoid duplication. There is every reason to fully focus on the financial accounting aspects and to share the available capacity on sustainability with the SEC and the EU.
As a supplement: On 29 July, the IASB Third Agenda Consultation was adopted, setting out the priorities for the next five years: it did include the subject of climate effects on the financial figures, but no project on how best to deal with the consequences of, for example, a more circular approach to the use of products. A more than missed opportunity and typical of the non-holistic approach to regulation.
Some other respondents indicated that the ISSB proposals could literally serve as a basis for further elaboration by third parties (read EFRAG) in order to arrive at a ‘building blocks’ structure. This seems a nice solution, but still means a double amount of groundwork, while the ISSB basis is narrower and therefore less robust than, for example, the EFRAG Sustainability Board proposals.
The main lines of Tweuus’ response to to the proposals of the EFRAG Sustainability Board are more of a conceptual and governance nature.
For example, the current (first set) proposals are written for the very large and large companies. At a later stage, sustainability rules for smaller companies are also planned, as well as further elaborations at the sector level. It is important that guarantees are put in place now, also legally anchored, that the final rules for SMEs do not mean that large companies can put unlimited pressure on smaller companies to provide those sustainability data which these large companies can reasonably collect themselves through their own measures.
Comments were also made that the quality of the Management Report would be better served by including a limited selection of all sustainability elements, which then clearly indicate what the management is actually steering on; the other sustainability issues to be reported can then be included further on in the explanatory notes.
For further explanation, an appointment can of course be made.
