In its response, IFAC supports corporate reporting that better addresses a company’s ability to create long-term value and is decision useful for investors and other stakeholders. IFAC welcomes the European Sustainability Reporting Standards (ESRS) while noting significant concerns regarding the need for interoperability that supports a global system for reporting. IFAC notes that all international and regional approaches must align key concepts, terminologies, and metrics to avoid regulatory fragmentation, especially on matters of materiality.

The response notes that implementation by companies and enforcement by regulators of the new standards are essential to ESRS success. Therefore, IFAC urges additional transitional reliefs to allow companies sufficient time to implement governance, processes, reporting capacity, and internal controls.

Access the full response on the European Commission website.