ERU, Alm.del - 2022-23 (2. samling) - Bilag 86: Notat samt høringssvar om bæredygtig finansiering (MSEG) og Regnskabskontroludvalget (ARC), fra erhvervsministeren

Erhvervsudvalget 2022-23 (2. samling)
ERU Alm.del Bilag 86
Offentligt

07 March 2023

2022 - 4706

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Danish government response to the consultation of MSEG and ARC

regarding the draft European Sustainability Reporting Standards

The Danish Government would like to thank the Commission for the

hearing of the Member States Expert Group (MSEG) and the Accounting

Regulatory Committee (ARC), regarding the draft European Sustainabil-

ity Reporting Standards (ESRS).

The Danish Government support the objectives of the Corporate Sustaina-

bility Reporting Directive (CSRD) aimed at enhancing and standardizing

digital sustainability reporting, contributing to the sustainable and digital

transformation of European businesses.

We see the standards as an effective tool to ensure transparency and com-

parability of sustainability reporting. It is essential to create transparency

and comparability regarding sustainability and make rules that are fit-for

purpose and adds value for the users of the data. The European Sustaina-

bility reporting standards will not only have a big impact on sustainability

reporting and the availability of sustainability information, but ideally also

facilitate a market-driven transition to a sustainable economy, thereby hav-

ing

a positive impact on the transition of the European companies’ business

models and strategies towards a more sustainable future.

Given the statutory nature of the CSRD on sustainability reporting, it is of

great importance that the standards are meaningful, understandable and

provide guidance for meeting the requirements.

In general, it is very important that the final reporting standards are execut-

able for the reporting undertakings if the CSRD is to be a success. We

acknowledge that the European Financial advisory Group (EFRAG) has

reduced the number of key performance indicators (KPIs) and disclosure

requirements (DRs) when compared to the draft sent for consultation be-

fore sending the ESRSs to the Commission, but we are still concerned re-

garding the extent of the reporting and the potentially high administrative

ERU, Alm.del - 2022-23 (2. samling) - Bilag 86: Notat samt høringssvar om bæredygtig finansiering (MSEG) og Regnskabskontroludvalget (ARC), fra erhvervsministeren

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burdens on the reporting undertakings. There is a risk that data overload

will lead to invalid and/or incorrect data.

It must be ensured that the reporting requirements are not too comprehen-

sive

–

as of now we risk that the many reporting requirements are unman-

ageable for our undertakings. The reporting requirements must be balanced

and lead to reliable reporting, thereby helping the undertakings in leading

the way for a green and sustainable transition.

General remarks

We would like to emphasize the importance of assisting the preparers and

undertakings when implementing the new reporting standards. To ensure a

level playing field amongst the Member States we see a need for an insti-

tutionalized set-up regarding interpretations as well as general implemen-

tation guidance.

The ESRS contain very extensive DRs, with a high degree of complexity

in several areas. Additionally, some of the mandatory DRs go beyond what

is needed to comply with other legal requirements. The list of mandatory

DRs should still be considered to be reduced if the DRs do not constitute

disclosure linked to reporting requirements for the financial institutions.

Concerns and considerations on prioritization of DRs apply to the assur-

ance engagements regarding sustainability reporting as well. For some data

points, it is more important to be provided with an assurance opinion than

for others

. While we agree that an explanation should be provided, adding

the explanation as a part of the submitted sustainability report increases the

extent of the report. We suggest that the auditor should be provided with

those explanations for the assurance opinion while leaving them out of the

sustainability report made public.

Finally, a more extensive phase-in approach should be considered. This is

especially relevant for DRs with high granularity as well as the DRs cov-

ering areas with immature measurement principles, like biodiversity and

DRs with little or sparse application guidance.

For comments regarding the specific draft reporting standards, please see

the annex to this response.

E.g., in ESRS 2, paragraph 56 and ESRS 1, paragraph 38, in case the given datapoint is omitted

due to the materiality assessment, a brief explanation of this conclusion is required.