​Call for members of the European Corporate Reporting Lab Steering Group reveals intended structure and remit

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14 Sep 2018

In March 2018, the European Commission published an action plan on sustainable finance that included as one of the action points the creation of a European Corporate Reporting Lab as part of the European Financial Reporting Advisory Group (EFRAG). The idea was expected to result in something similar to the UK FRC Financial Reporting Lab, however, the solution found differs quite considerably as regards structure and remit.

As the call for candidates for the Steering Group of the Lab and an agenda paper for the meeting of the Accounting Regulatory Committee (ARC) in June 2018 reveal, the Lab is to be a separate body under the umbrella of EFRAG, drawing on the EFRAG budget and the EFRAG Secretariat for the day-to-day operation, but the Lab's output "will not be subject to usual EFRAG approval procedures or signed off by the EFRAG Board". (Participants of individual projects of the Lab will have the opportunity to comment on draft project reports before publication, but will also not be asked to approve such reports.)

The European Lab also differs from the UK Lab in that its remit, at least initially, is restricted to non-financial reporting and sustainability reporting although it is noted that the remit of the European Lab should be extended "in the medium term" to include, for example, integrated reporting. Similarly to the UK Lab, however, the "overall aim of the laboratory is to improve corporate reporting [...] and promote good reporting practices". Boundaries of this work are that it is "not the task of the laboratory to develop authoritative recommendations [...] or to develop policy recommendations" and that the Commission may steer the Lab's work by "request[ing] the laboratory to work on particular topics that fall within its scope". 

The unusual structure (the European Commission setting up the Lab under the roof of EFRAG without giving the EFRAG Board a formal say in its work) is also reflected in the composition of the Steering Group. While currently still looking for members, the Chair and the Vice-Chair of the group have already been decided: The Chair will be the President of EFRAG Board (Jean-Paul Gauzès) even though the EFRAG Board will not be involved in any decisions; the Vice-Chair will be the Head of Unit from the European Commission responsible for policy on corporate reporting (Alain Deckers).

More information on the Action plan on sustainable finance, the European Lab, and the Steering Group can be found here:

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