Stockholm (NordSIP) – The European Sustainability Reporting Standards (ESRS) received a welcome boost with the announcement of a collaboration between global disclosure non-profit CDP and the European Financial Reporting Advisory Group (EFRAG). The two organisations will work together to accelerate the market uptake of the new standards, which were adopted by the European Commission in July 2023.
The ESRS will be phased in over time but will nevertheless eventually apply to all 50,000 companies currently subject to the Corporate Sustainability Reporting Directive (CSRD). CDP’s disclosure platform is used by 23,000 companies to date, and the organisation is gearing up for the change. Speaking to NordSIP, CDP pointed to the rapid progress made in market coverage over the past year: “We achieved a 24% increase in companies disclosing globally from 2022 to 2023, including a 26% increase among European companies.” The anticipated further influx of reporting companies will be accommodated on a new technology platform designed to smooth out the disclosure process.
CDP in the Nordics
CDP’s coverage of the Nordic Region is progressing well, with 160 companies in Norway and 240 companies in Denmark disclosing on the platform in 2023, which represents a 53% year-on-year increase for these two countries. 300 Swedish and 210 Finnish firms also reported via CDP this year, an increase of 23% and 26% respectively. 10 companies disclosed in the smaller Icelandic market, a third more than in 2022. CDP has also been focusing on promoting greater disclosure from unlisted privately owned Nordic companies. As previously reported in NordSIP, CDP collaborated with Danish consultancy the Footprint Firm on a detailed survey of 2,000 companies in the region, which revealed that only 42% of them reported on Scope 3 emission and almost none had put in place formal commitments to biodiversity. While acknowledging the greater in-house sustainability expertise available to listed companies, CDP continues to encourage Nordic private companies to ready themselves for the greater reporting expected of them over the next two years.
The ESRS have been designed to be interoperable with the IFRS S2 climate-related disclosure standard developed by the International Sustainability Standard Board (ISSB) and the Global Reporting Initiative (GRI) standards. They encompass a broad range of sustainability themes, including climate change, pollution, water and marine resources, biodiversity and ecosystems, and resource use and circular economy. CDP’s platform covers climate change, forests, water security, impacts and risks, and will be further expanded to facilitate the new collaboration. CDP advised NordSIP that it plans to publish a document in this November 2023 providing a mapping of current coverage against the ESRS requirements.
Commenting on the launch of the collaboration with EFRAG, CDP’s Executive Director Europe Maxfield Weiss said: “The ESRS are a watershed – an obligation for thousands of companies inside and outside the EU to report how they impact climate change, pollution, water and biodiversity. Their implementation through the CSRD will help ensure a level playing field and support for the companies already investing in their transition. These ambitious EU standards and CDP’s global environmental disclosure platform are essential to secure a sustainable economy that works for people and planet.”