ICEBERG DATA LAB
IDL
Iceberg Data Lab provides ESG Data to Financial institutions.
ID: 449412739004-61
Lobbying Activity
Response to European Sustainability Reporting Standards
7 Jul 2023
We appreciate the European Commissions draft of the first set of the European Sustainability Reporting Standards (ESRS) which aims to enhance data availability and comparability to investors and the general public about sustainability issues and demonstrates the determination of the European Union toward a sustainable future, specifically the highlight of double materiality which goes beyond the International Sustainability Standard Board (ISSB)s recently released standards. We want to reiterate the necessity to maintain the mandatory reporting requirements of the data points that are coherent with the exigence of the implemented regulations in the European Union, such as the Sustainable Finance Disclosure Regulation (SFDR), Benchmark Regulation, and Pillar 3 disclosure requirements. Nonetheless, the materiality assessment of originally mandatory disclosures on certain sustainability topics undermines the position of the EUs pioneering leader in sustainable financial standards and the goal of the EU Green Deal to improve the well-being and health and citizens and future generations by providing fresh air, clean water, healthy soil, and biodiversity. It is not justifiable that climate-related disclosure (ESRS E1) is deemed mandatory but not biodiversity-related disclosures (ESRS E4), which is voluntary under materiality assessment. We acknowledge the challenges of some disclosure requirements by the ESRS, such as biodiversity and ecosystem-related disclosure (ESRS E4). However, climate and biodiversity impacts and opportunities are intertwined and cannot be considered separately. If ESRS E1 is mandatory for all undertakings, so should ESRS E4. Moreover, Frances Article 29 of the Energy and Climate Law has required the undertakings to report biodiversity impact and dependency. The European Commission shall be parallel or more ambitious as its member state in this regard. According to the scientific communitys voices, such as the Intergovernmental Science-Policy Platform on Biodiversity and Ecosystem Services (IPBES), climate change, along with land/water/sea use change, pollution, invasive species & others, are five key pressures that drive the loss of the biodiversity. Disclosing the information on the direct impact drivers of biodiversity loss, impact, and dependencies on ecosystems would be extremely helpful for investors to grasp a whole picture of investee companies status quo when it comes to the interaction with biodiversity. Moreover, the European Central Bank (ECB), represented by its Executive Board Member and Vice-Chair of ECB Supervisory Board, Frank Elderson, highlighted in his speech on 8 June 2023 that the eurozone financial system is highly dependent on nature, both directly and via the supply chain. In ECBs recent report, 72% of the eurozone companies are highly dependent on at least one ecosystem, and 75% of bank loans are highly dependent on at least one ecosystem. ECB mentioned that it would consider nature-related risks to realize its mandate. The ECB warns that Europes economy is highly dependent on ecosystem services and that these risks can spread to the financial system, potentially triggering instability. []Our economy relies on nature. Thus, destroying nature means destroying the economy. European Commission shall take into account the banking systems need and enhance nature-related disclosures correspondingly. We suggest EU Commission reconsider the optional disclosure requirement when it comes to ESRS E4 Biodiversity or at least explain the rationale behind retaining ESRS E1 mandatory while other sustainability topics are optional under materiality assessment.
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