The discussion first saw an introduction to the final report on preparatory work for possible EU non-financial reporting standards. The presenter explained that the European Commission (EC) had asked the European Financial Reporting Advisory Group (EFRAG) to undertake preparatory work for the possible elaboration of EU non-financial reporting standards in view of the political ambition and urgent timetable of the European Green Deal and sustainable finance agenda. The task force set up by EFRAG to (a) assess the current state of non-financial reporting and the currently existing reporting standards and frameworks and to (b) report on the best way forward came to the conclusion that the current fragmented non-financial reporting landscape does not offer a solution that could be taken per se as an EU reporting framework. The final report of the task force, therefore, proposes setting up a European Sustainable Standard (ESS) setter that would develop EU non-financial reporting standards under an ambitious roadmap that would see first drafts of standards by mid-2022.

While the standard setters participating in the IFASS meeting acknowledged the enormous amount of work invested into the comprehensive assessment in a very short time, there were many questions and concerns. Apart from questions regarding the maturity of the data available and the operationalisability of the new framework given assurance questions, the main comments concerned a perceived competition between international initiatives, especially the IFRS Foundation's plans to set up an international Sustainability Standards Board (SSB), and the ESS. Speakers noted the need for a global solution as the underlying problems are global as well and as companies act globally. They acknowledged the current fragmented reporting landscape, but pointed at frameworks and standards that can be used to fill gaps until a truly global solution is available (TCFD and SASB were most commonly mentioned). One participant also asked whether the standard setter for ESS was intended to fill the gap until the SSB would take over. Generally, the fear was expressed that ESS would drive international standard-setting in this area further apart as moving ahead single-handedly would lead to one more set of standards being out there that would need to be converged with global standards in the end.

The presenter responded by pointing out the urgency of non-financial reporting standard-setting and the wish to keep up the momentum of EU developments. He also underlined that the development of ESS was by no means intend to occur in isolation but open to co-operation and contribution of other interested parties. Finally, he noted the fact that EU standards would automatically take prevalence as they would be the most complex and comprehensive standards and as their application would be mandatory. He also pointed out that convergence would not be necessary on all topics as the EU standards would cover more areas than envisioned by the IFRS Foundation.

The presentation was somewhat overtaken by the fact that the Trustees of the IFRS Foundation published a statement announcing the strategic direction and further steps of their sustainability initiative while the presentation was given. The IASB Vice Chair commented on that and noted that she was relieved to see that the philosophy behind the EU ideas and the Trustees' decisions seemed to be consistent and that there were many commonalities. She noted that the IFRS Foundation was moving much faster than people seemed to realise and would hit the ground running in their standard-setting work as it would build on existing frameworks such as the TCFD. She concluded by also noting the need of a global solution and the importance of working together.