The European Union should align its policies with international corporate climate reporting rules in order to simplify life for companies and save time in the long run, a global standard setting board said on Wednesday (31 August).
That could mean extending slightly a November deadline to complete
drafts as the EU draws up the text on mandatory disclosures for 50,000
companies in the bloc to report how climate change affects their
business.
Climate disclosures are designed to give investors rigorous and
comparable information on how climate change affects companies as
regulators worry about greenwashing, whereby companies exaggerate their
environmental credentials or downplay the impact of global warming.
The EU’s November deadline places it ahead of the global pack and the
new International Sustainability Standards Board (ISSB), which aims by
the end of the year to draw up “global baseline” disclosures that
companies outside the EU, such as Britain, China and Japan, could apply.
ISSB chair Emmanuel Faber said the board holds weekly meetings with
the EU’s standards writing body EFRAG, but that the time pressure the EU
is under creates “complexities”.
“I would hope that our EU colleagues in the discussions feel that the
prize of aligning is such that it’s worth having more time, if needed,”
Faber told the European Parliament.
“On climate I think we are very close on substance,” Faber added.
Companies will have to set a much broader range of sustainability
targets under draft new European Union reporting standards,
environmental impact body CDP said on Tuesday (3 May).
The European Financial Reporting Advisory Group (EFRAG) set out its first draft sustainability standards
for public consultation in May. Final standards will be sent to the
European Union’s executive European Commission by November for adoption.
The norms will be used by listed companies across the EU to implement
mandatory environment, social and governance (ESG) disclosure
requirements under the bloc’s new Corporate Sustainability Reporting
Directive.
But the EU rules risk diverging from similar standards currently under consideration in the United States....
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