Forum per la Finanza Sostenibile Ente del Terzo Settore
ItaSIF
Il Forum per la Finanza Sostenibile è nato nel 2001.
ID: 872336025900-02
Lobbying Activity
Response to European Sustainability Reporting Standards
6 Jul 2023
ItaSIF, a non-profit association actively committed to the sustainable evolution of the financial system, acknowledges the publication of the first set of ESRS. Our response builds on the perspectives of a wide range of responsible investors and civil society organizations, committed to implementing a robust sustainable finance framework in Italy and beyond. Indeed, we believe that accurate corporate reporting of sustainability-related matters is essential to facilitate effective capital allocation and foster the green transition. Currently, the draft DA runs the risk of undermining the development of a comprehensive framework and may result in the absence of clear timeframes for its timely implementation. Consequently, investors and participants in the financial markets risk facing the well-known challenges of obtaining relevant, comparable, and reliable information that is necessary to finance the transition to a sustainable economy. On the corporate front, there is a tangible risk of not encouraging companies towards self-analysis and assessment processes related to sustainability potential, as well as making funding and investments more difficult in a market where data comparability is limited. In this context, we call on the European Commission to maintain the ambition and integrity of the initial set of ESRS, as indicated in EFRAG's technical opinion to the Commission published in November 2022. To this end, we would like to underscore a few specific points. We support key climate indicators being mandatory, including Scope 1, 2, and 3 greenhouse gas emissions, as well as the cross-cutting information necessary for investors to assess the credibility of companies' transition plans (e.g.: core own workforce data). Similarly, it is necessary to ensure the mandatory disclosure of environmental and social indicators relevant to regulations such as SFDR, the EU Regulation on Climate Benchmarks, and Pillar III disclosure, as well as other regulations related to investor reporting. Making the disclosures of core metrics subject to materiality may result in incomplete data with no appropriate explanation and may increase the risks associated with greenwashing and socialwashing. The Commission's current approach risks undermining investors' capacity to access reliable and comparable information necessary for informed decision-making and capital allocation aligned with sustainability goals. Moreover, it constrains their ability to meet mandatory reporting obligations, making it more challenging and burdensome for them to carry out their sustainability due diligence. The fully optional nature of disclosure requirements such as biodiversity impact metrics and working conditions of non-employee workers (particularly agency workers) should be re-evaluated. This approach could hinder investors from incorporating these issues into their sustainability due diligence and PAI indicators, as they cannot depend on companies to provide reliable information in these areas. Furthermore, the standards fail to address important diversity policies (e.g. age, ethnicity, minorities, etc.) which are relevant from the social justice perspective and considered by an increasing number of investors. Finally, the proposed additional phase-ins seem to lack a meaningful purpose, particularly for non-listed companies and other categories of companies already subject to general opt-in provisions, set directly in the CSRD. Furthermore, the transitional provision that allows companies with fewer than 750 employees to postpone the reporting of Scope 3 emissions, which pertain to the value chain, primarily affects SMEs within it, which will be able to postpone the requests from downstream companies. Companies with less than 750 employees that were not previously subject to the NFRD could potentially report for the first time on those aspects in 2027 considerably behind the initial CSRD schedule.
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