POSITION | SUSTAINABILITY | REPORTING
The European Sustainability Reporting (CSRD): lack of international coherence Necessary improvements to avoid double reporting obligations
June 2022 Support for the global minimum standard from the ISSB German industry has a vital interest in Europe taking a leading position in the establishment of highquality sustainability reporting recognized by the international capital market. To achieve this, it is essential that European sustainability reporting is aligned with global minimum standards, which will be published by the end of the year by the ISSB (International Sustainability Standards Board) based in Frankfurt. European sustainability reporting should be based on the global minimum standards (global baseline) for sustainability reporting.
The CSRD must build on the global baseline According to the state of negotiations on the "Corporate Sustainability Reporting Directive" (CSRD), there is a threat of a European solo effort in sustainability reporting. So far, the structure of the CSRD and the drafts of the "European Sustainability Reporting Standards" (ESRS) are not coherent with the international approach by the ISSB. However, this is a precondition for the international capital market. There must be internationally uniform minimum standards (global baseline).
A unilateral European approach leads to double reporting obligations The concept of the CSRD risks to deviate considerably from the "global baseline". This is due to a lacking focus on the investors as the primary stakeholder of the reporting, the deviating of financial materiality and the potential separation of financial and sustainability reporting. With these requirements, European sustainability reporting according to the CSRD becomes a mandatory regulatory exercise without relevance for the global capital market. Thus, businesses will be confronted with double reporting obligations and a considerable administrative burden which must be prevented.
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