April 21, 2021
Proposed European Commission legislation spells out important components to completing the corporate reporting ecosystem
IFAC, the International Federation of Accountants, which comprises 180 member and associate organizations and represents more than 3 million professional accountants globally, welcomes the publication of the much-anticipated draft text of the European Union’s revised Corporate Sustainability Reporting Directive.
This ambitious proposal demonstrates leadership on the issue of corporate reporting. The legislation seeks to put sustainability-related reporting on the same footing as traditional financial reporting. This is long overdue. Specific proposals, such as where sustainability information is reported, mandatory assurance, a digital reporting taxonomy, and expanded scope for oversight by audit committees, are all important elements of enhancing the corporate reporting ecosystem to include sustainability-related information.
As progress on the IFRS Foundation’s Sustainability Standards Board accelerates, IFAC believes policymakers have a unique opportunity to build a truly global system for sustainability reporting. We hope the EU’s important work ultimately contributes to—and amplifies the impact of—the emerging global system.
IFAC CEO Kevin Dancey said, “It is great to see a commitment to the needs of investors as well as other stakeholders, and to cooperation and alignment with international initiatives, including proposed work of the IFRS Foundation as well as the efforts of various public authorities. IFAC urges the IFRS Foundation to move with speed so that the benefits of baseline standards for enterprise value reporting will be available to all jurisdictions, while preserving the flexibility for disclosures that meet local needs addressing wider sustainability development goals. These are truly exciting times. We will continue to engage with the various stakeholders in this space as we all work toward the shared goal of a global system for reporting sustainability-related information in the public interest.”