CDP, a climate research provider and environmental data disclosure platform, and the European Financial Reporting Advisory Group (EFRAG) today announced the launch of a new agreement under which CDP will align its disclosure system with the EU’s recently adopted European Sustainability Reporting Standards ( ESRS) will maximize.
CDP operates a global environmental disclosure system, which allows investors and other stakeholders to measure and track the organization’s performance in key environmental sustainability areas, including climate change, deforestation and water security. The platform provides annual company scores – typically published in December each year – for each of the major categories, and the data is also used by information services providers such as Bloomberg, STOXX, Trucost, FTSE/Russell, MSCI and ISS ESG to provide investment research, products, indices and ratings.
EFRAG was commissioned by the European Commission in June 2020 to draw up new EU standards for sustainability reporting. The ESRS, developed by EFRAG and officially adopted by the European Commission in July, sets out the rules and requirements for companies to report on sustainability-related impacts, opportunities and risks under the upcoming EU Corporate Sustainable Reporting (CSRD) Directive.
The CSRD, which is on track to apply from early 2024, will significantly expand the number of companies required to provide sustainability information from around 12,000 currently to over 50,000, and introduce more detailed reporting requirements on companies’ impact on the environment , human rights and human rights. social norms and sustainability risks. Over time, the CSRD will also apply to many large non-EU companies operating in the EU.
According to CDP and EFRAG, the new collaboration aims to accelerate the market introduction of the ESRS, help companies prepare for the new reporting requirements and support market readiness for the new environmental reporting system.
Maxfield Weiss, Executive Director of CDP Europe, said:
“With the bar now being raised globally on environmental data disclosure, our partnership with EFRAG will ensure that companies preparing to report can do so through CDP. As the only independent global environmental information system, CDP is proud to continue and scale our role in making best-practice corporate reporting a standard.”
Under the new partnership, CDP said it will explore and implement the alignment of its disclosure system with the ESRS, while EFRAG will provide technical expertise, access and guidance. In addition, to support capacity building among companies reporting on ESRS data points through the disclosure platform, CDP will provide webinars and detailed technical guidance materials, supported by EFRAG.
In a statement announcing the new partnership, CDP and EFRAG highlighted an important area of alignment between the ESRS and the disclosure platform, with European disclosure standards following a dual materiality approach, requiring companies to report on how they expect climate and environmental risks. changes that affect their businesses, as well as how they impact people and the planet, while CDP’s system already covers areas such as climate change, forests and water security, impacts and risks.
Patrick de Cambourg, Chairman of the EFRAG Sustainability Reporting Board, said:
“Only with robust environmental data can financial markets and other stakeholders identify companies with credible plans to reduce their impact so they can thrive in a zero-emission, nature-positive future. This means that companies not only report how climate change could affect their value, but also how they affect the environment. The standards that EFRAG has developed in its role as technical advisor to the European Commission will support capital markets in comparing companies, reducing greenwashing and redirecting capital. And our collaboration with CDP will help accelerate the market introduction of these standards, building the capacity of both EU and non-EU companies to use them as regulations emerge.”
The launch of the new partnership follows CDP’s announcement last month that it will align its sustainability reporting questionnaire with the IFRS Foundation’s International Sustainability Standard Board’s new climate information standard from next year, and will consider other emerging sustainability information systems in the future. to reduce the reporting burden on companies and encourage broader reporting on important environmental issues.