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From the European Competitiveness Compass published on 29/1: Europe must act in unison and play to its strengths and quickly harness its own pathway to innovation-based productivity growth towards a climate-neutral future. Three core areas for action: 1. Closing the innovation gap 2. A joint roadmap for decarbonisation and competitiveness 3. Reducing excessive dependencies and increasing security ⭕ Close the innovation gap and digitalise to lift Europe’s productivity growth Innovation must be at the heart of European renewal. The Draghi report shows that productivity growth is the result of a combination of two forces: disruptive innovation brought about by new, dynamic start-ups challenging incumbents; and efficiency gains in mature traditional industries applying these innovations. A dedicated EU Start-up and Scale-up Strategy will be created to close the innovation gap. Digitalisation and diffusion of advanced technologies across the European economy are the second necessary ingredient to lift Europe’s productivity growth. Overall, 70% of the new value created in the global economy in the next 10 years will be digitally enabled. ⭕ Promote clean tech and new circular business models to meet the objective of becoming a decarbonised economy by 2050 The EU needs to develop lead markets and policies to reward early movers. Energy intensive sectors (steel, metals, chemicals…) are among the most vulnerable in this phase of the transition. These industries are also the backbone of the European manufacturing system, and produce inputs vital for whole value chains. To accompany their transition, tailor-made action plans will be presented following the Clean Industrial Deal. Resource efficiency and boosting circular use of materials helps decarbonisation, competitiveness and economic security. The European remanufacturing market’s circular potential is projected to create 500,000 new jobs by 2030. A Circular Economy Act proposal will serve to catalyse investment in recycling capacity. This will be accompanied by the roll-out of Eco-design requirements on important product groups. ⭕ The security environment is a precondition for EU firms’ economic success and competitiveness In a global economic system fractured by geopolitical competition and trade tensions, the EU must integrate more tightly security and open strategic autonomy considerations in its economic policies. The Single Market is critical to build continental size in a world of giants. It is today the home market for 23 million companies, providing goods and services to almost 450 million Europeans. Removing remaining intra-EU barriers and expanding the Single Market will help competitiveness, by providing bigger markets, lowering energy prices and enhancing access. Security and resilience can also become a driver for competitiveness and innovation. Source: https://lnkd.in/dVVfEtk6

Today 29/1, the European Commission presented the Competitiveness Compass, providing a strategic framework to steer the Commission's work. Key takeaways on the subject of sustainability reporting 🌿: ⭕ Simplify but stay the course Europe has set out an ambitious framework to become a decarbonised economy by 2050. It will stay the course, including through the intermediate 2040 target of 90%. Regulatory burden has become a brake on Europe’s competitiveness. The Commission will therefore aim to achieve the agreed policy objectives in the simplest, most targeted, most effective and least burdensome way. ⭕ Reduce the cost of administrative burdens The set burden reduction targets refer to the costs of all administrative burdens, and not only reporting requirements. The targets are to reduce recurrent costs by at least 25% for all companies, and at least 35% for SMEs through dedicated measures for SMEs. This will start next month with the first of a series of Simplification Omnibus packages. The first Omnibus will, among others, cover a far-reaching simplification in the fields of sustainable finance reporting, sustainability due diligence and taxonomy. The sustainable finance framework is aimed at mobilizing investment in the clean transition. The Commission will ensure better alignment of the requirements with the needs of investors, but also ✔️ proportionate timelines, ✔️ financial metrics that do not discourage investments in smaller companies in transition, and ✔️ obligations proportionate to the scale of activities of different companies. ⭕ Address trickle-down effects The trickle-down effect will be addressed to prevent smaller companies along the supply chains from being subjected in practice to excessive reporting requests that were never intended by the legislators. ⭕ Define a new category of company size: small mid-caps To ensure proportionate regulation adapted to companies’ size, a new definition of small mid-caps will soon be proposed. By creating such a new category of company, bigger than SMEs but smaller than large companies, thousands of companies in the EU will benefit from tailored regulatory simplification in the same spirit as SMEs. The Commission is also preparing a simplification of the Carbon Border Adjustment mechanism for smaller market players. ⭕ Digitize reporting Digitalisation will go hand in hand with simplification to reduce the reporting burden. Wherever possible, reporting must move to digital formats based on standardised data. Companies and public authorities must be better accompanied when it comes to implementing EU legislation through stepped up support, capacity building and technical assistance.   Source: https://lnkd.in/d_gN2ySa   #getCSRDready, #Omnibus

As part of the EU ‘SME relief package’, VSME is designed to be a one-stop-shop solution for sustainability data requests - and even more so with the upcoming Omnibus simplification package. 🌿   The Voluntary Sustainability Reporting Standard VSME, published by #EFRAG in December 2024, is aimed at supporting the EU Corporate Sustainability Reporting Directive (‘CSRD’), while boosting SME competitiveness and resilience.   It is expected to become a one-stop-shop solution for sustainability data requests for lenders, investors and corporate clients, directed at entities falling outside the scope of the CSRD – setting a de facto limit ❗ to the multiple requests that non-CSRD companies and organisation are currently facing.   As a Friend of EFRAG Sustainability Reporting, Cleerit supports this effort with the online SaaS platform 👉 vsme.mycleerit.com, securely hosted in the EU.   It is offered to:   ⭕ non-CSRD companies and organisations faced with sustainability data request – effectively relieving them from the burden of responding to numerous ad hoc requests with an online VSME report template,   ⭕ large CSRD in-scope corporations who desire to collect, consolidate and manage sustainability data from their value chain actors, online in one secure place – effectively enabling the automation of digitized cost-efficient data flows.   An individual company or organisation can subscribe to the vsme.mycleerit.com platform, or it can be invited by a Business Partner to subscribe.   The activation cost is 100 € per account. Business Partner corporations who subscribe for a larger group of companies are offered a discounted activation cost.   There are two categories of subscriptions for SMEs and other companies preparing for structured sustainability reporting processes:   ➡️ the ‘Share‘ option (5€/month), with a secure online access to the VSME report template,   ➡️ the ‘Manage‘ option (15€/month), which also gives access to features for managing sustainability-related impacts, risks and opportunities (IRO’s) and proactively monitor sustainability performance.   We also offer Business Partner accounts to assist larger corporations in their effort to collect sustainability data from their value chain actors.   The VSME report template is currently available in English, French, Swedish & German. 🇬🇧 🇫🇷 🇸🇪 🇩🇪   The vsme.mycleerit.com platform is the perfect – cost & resource efficient – meeting point 🤝 for non-CSRD companies and organisation, and CSRD in-scope business corporations – together contributing to a sustainable, competitive and resilient economy.   You are welcome to request your account here 👉 https://lnkd.in/dRVkVs-W #VSME, #getCSRDready, #CSRD, #ESRS, #ESG, #Strategy, #Governance, #SustainabilityReporting, #Digitalisation, #CleeritESG, #FriendOfEFRAG

2025 ESG and Sustainability insights from an article on Harvard Law School Forum on Corporate Governance ESG will continue to be an evolving area and critical for business resilience in 2025. ⭕US Developments With a Republican-led Congress, efforts to scrutinize net zero and climate action initiatives and alliances are expected to continue, alleging violations of antitrust and/or fiduciary duty, as well as consumer protection laws. At the same time, US companies will need to continue to manage physical risks to their assets or business due to extreme weather, and comply with non-US sustainability regulations. Boards should also continue to ask questions on how to manage risk while still progressing and staying true to its publicly disclosed business strategy. Given that many US entities operate in a global context, there will also be a need to navigate US trends against the backdrop of potential reputational or operational risks associated with diverging from global ESG trends. Especially if the US seeks to counter the extraterritorial impact of sustainability regulations (particularly from the EU) through trade negotiations, legislation, or other mechanisms. ⭕EU Developments The focus for 2025 has been an “omnibus” initiative to simplify the EU Taxonomy, CSRD, and CSDDD. Suggestions from von der Leyen that any such omnibus initiative is about simplification and not substantive change, indicate that the EU is seeking to strike a balance between maintaining high ESG and sustainability standards and ensuring economic competitiveness. ⭕Mandatory ESG Reporting 2025 will mark a milestone in mandatory sustainability reporting, with the first year under the EU’s CSRD, and other reporting obligations, such as rollout of national reporting requirements in connection with the ISSB standards. Robust data collection, reporting processes, and appropriate governance and oversight will be needed to respond to these reporting requirements. ⭕Value Chains The focus on near-shoring and reshoring value chains is expected to intensify, driven by geopolitical tensions, ongoing supply chain disruptions, and regulatory requirements. This area will also likely be influenced by broader antitrust/trade developments, particularly in the context of China. Entities need to continue to reevaluate their supply chains to enhance resilience, reduce risk, and ensure compliance with evolving standards. ⭕ Greenwashing litigation Greenwashing risk continues to be on the rise as stakeholders demand greater transparency and accountability. Companies are under increased scrutiny to substantiate their ESG claims and avoid misleading stakeholders, including consumers. Robust verification processes, thorough due diligence on ESG initiatives and transparent communication are critical to mitigating legal and reputational risks. Source: https://lnkd.in/dPb6A4kg

This information could be interesting, especially for German and Italian companies: if you are registered with the EU Eco-Management and Audit Scheme (EMAS) you can use it to streamline your ESRS reporting process. The document published by EFRAG on 16/1 (provided in the link below) includes a correspondence mapping between EMAS and ESRS disclosure requirements. EMAS is a voluntary environmental management system designed by the European Commission with the aim to support the continuous improvement of the environmental performance of companies and other organisations. All EMAS organisations are transparently listed in a public register hosted by the European Commission. EMAS requires registrants to prepare an annual report/statement, including information on the environmental policy, targets and actions as well as a set of core environmental performance indicators regarding energy, emissions, water, biodiversity, material use and waste. 👉 Many of the environmental disclosure requirements of the ESRS can therefore be built on data already available within the EMAS framework, by using the incorporation by reference possibility provided by ESRS 1 paragraph 121 – in order not to duplicate efforts. Both EMAS and ESRS require information to be verified by third parties. The validation done by EMAS verifiers corresponds at least to the same level of assurance as the CSRD limited assurance requirement. ❗ It is interesting to note that Germany and Italy have, to date, the highest number of EMAS registered companies and organisations. As per November 2024, 1 183 organisations in Germany were registered, while only 10 in France and 17 in Sweden. In Italy, 1 169 organisations were registered and in Spain 853. 🌿 The management system put in place in accordance with EMAS can meaningfully complement and support environmental reporting under the ESRS by providing useful and reliable data and a framework to monitor progress in meeting environmental targets. It can be a useful tool for companies falling under the ESRS scope, enabling you to produce reliable and consistent information over several reporting cycles. Under EMAS appropriate governance structures for the environmental management system have to be set up to improve environmental performance. The organisations have to establish an environmental policy. The EMAS requirements to establish, and report upon, an environmental management system, align well with the general reporting areas of the ESRS (governance, strategy, management of impacts and risks, metrics and targets).   Download the correspondence mapping between ESRS and EMAS here: https://lnkd.in/dG2QzJDK Read more about how to join EMAS here: https://lnkd.in/daqwN-cd --- ✅ www.cleeritesg.com    #getCSRDready

The French Authority of Accounting Standards (ANC) has published a document contributing to the debate on the evolution of the CSRD and the ESRSs in the perspective of the #Omnibus currently in preparation. ANC advances proposals aimed at alleviating the burden resulting from the CSRD, while strengthening its effectiveness in managing the transition. France was the first EU member state to transpose CSRD in Dec 2023 and the ANC has done a remarkable job of providing guidance to French companies on the ESRS. ANC encourages us to “not lose sight of what's essential: establishing robust standards applying to the communication of economic players means having the common language needed to understand each other and thus be able to make the right decisions”. ANC proposes 4 measures. The first 2 can be summarized as follows: ⭕ Introduce more proportionality into the reporting requirements ➡️ Increase the size threshold, to take into account the specificities of “intermediate-sized” companies. The European definition of a “large company” covers a large number of mid-sized companies, and the notion of “intermediate-sized”, does not exist in European law. Adopting thresholds consistent with that of the CS3D (1,000 employees and €450m turnover) would therefore be a reasonable solution. ➡️ Reduce the scope by adapting and extending the LSME standards to these “intermediate-sized” companies (except if they are PIE companies with >500 and turnover >€50m). Compared to the current ESRS, the LSME draft standards for listed SMEs simplify reporting by reducing the number of potential disclosures. Given the broader scope of the companies concerned, they should then be subject to a new review and to a consultation. ➡️ Postpone the application by 2 years, to FY 2027 (publication 2028), for these “intermediate-sized” companies, (except if they are PIE companies with >500 and turnover >€50m). However, such a revision should be finalized very quickly, so as not to put at odds the many member States that have faithfully transposed the CSRD. ⭕ Advance the review of the relevance of ESRS Set 1 for very large companies The review is currently programmed for 2029 as stipulated in CSRD. It should be advanced, but needs to be based on the lessons learned from the first sustainability statements that will have been produced and audited. Taking into account the need for public consultation, in practice, this means 3 financial years with the current standards: 2024, 2025 and 2026. To alleviate constraints, however, it is possible to extend the current transitional arrangements provided for in the ESRS by an additional year so that they do not end prematurely. --- In the table below I have summarized and compared two proposals, from the French ANC and the German government. Source : https://lnkd.in/dTejsK7v

Den 1/7 publicerade FAR ändringar i rekommendationen RevR 19 gällande svenska revisorers översiktliga granskning av den lagstadgade hållbarhetsrapporten. RevR 19 kan även i framtiden behöva justeras i takt med att nya vägledningar och rekommendationer publiceras. Du kan läsa mer om ändringarna här: https://lnkd.in/dPqG7DaA Syftet med RevR 19 är att säkerställa att svenska revisorer har en gemensam standard att följa vid granskning av företags hållbarhetsrapporter. RevR 19 utgår främst från ISAE 3000 med inslag från franska H3C:s vägledning för översiktlig granskning av hållbarhetsrapportering enligt CSRD, samt IAASB:s utkast till ISSA 5000. Hållbarhetsrapporten granskas av en auktoriserad revisor med särskild behörighet, som utses av bolagsstämman. Revisorn ska efter varje räkenskapsår lämna granskningsberättelsen till styrelsen senast tre veckor innan årsstämman. Om samma revisor utför revisionen av de finansiella rapporterna och den översiktliga granskningen av hållbarhetsrapporten får granskningsberättelsen över hållbarhetsrapporten tas in som ett särskilt avsnitt i revisionsberättelsen. I annat fall ska slutsatsen lämnas i en fristående granskningsberättelse. Revisorn ska uttala en slutsats med begränsad säkerhet om att hållbarhetsrapporten uppfyller de relevanta lagstadgade krav som fastställs i ÅRL. Revisorns slutsats ska omfatta: ➡️ om hållbarhetsrapporten uppfyller ÅRL:s krav, inklusive överensstämmelse med ESRS, ➡️ om den process som företaget genomfört för att identifiera rapporterad information har utförts såsom den beskrivs i hållbarhetsrapporten, ➡️ om kravet att märka hållbarhetsrapportering i ett enhetligt elektroniskt rapporteringsformat efterlevs (aktuellt först när den digitala taxonomin är antagen av EU), och ➡️ om rapporteringskraven i EU:s gröna taxonomiförordning artikel 8 efterlevs. Revisorn ska utvärdera hållbarhetsrapporten som helhet i syfte att bedöma att 🌿 informationen inte är vilseledande, och att 🌿 informationen som redovisas är tydligt och tillräckligt ingående beskriven i enlighet med kraven i ESRS. I samband med detta ska revisorn bedöma att hållbarhetsrapporten inte är, eller skulle kunna vara, missledande, beroende på bristande eller överdriven betoning på vissa grupper av avsedda användare, områden och/eller information om dessa områden, och att den tillgodoser de avsedda användarnas legitima informationsbehov. Granskningen innebär att revisorn förväntas bedöma: ➡️ om det finns uppenbara väsentliga IRO:er (impact, risks, opportunities) som saknas, eller ➡️ om DMA-processen bidrar till att ge en missvisande bild av företaget, dess värdekedja och väsentliga IRO:er. Källa: https://lnkd.in/dFcW9sQP   www.cleeritesg.com

On December 20, EFRAG published Technical adjustments to the list of datapoints in the Implementation Guidance 3 (IG 3 Excel Workbook), with a list of datapoints added/removed or amended in IG 3, as a result of clarifications and corrections collected so far. EFRAG plans to provide an updated version of the IG 3 Excel Workbook that will reflect these clarifications and corrections, in the spring of 2025, after the first cycle of ESRS reporting including clarifications stemming from possible additional Q&As that might be raised during the reporting season. ❗ EFRAG takes this opportunity to reiterate and emphasize the message that IG3 List of datapoints is there to support the definition of the content of the ESRS sustainability statement, but should not be used in an automatic compliance check-list. Its use cannot be decoupled from the overall materiality exercise. For topical disclosures, only datapoints that relate to material matters are to be considered in the analysis and reported if the undertaking concludes that their inclusion is needed, following paragraph 34 of ESRS 1. The final number of datapoints in the ESRS sustainability statement will critically depend on the specific circumstances of the undertaking, such as ✔️ which matters are considered material, ✔️ how many policies, targets and actions the undertaking has in place for material matters (they are to be reported only if they are in place), ✔️ how many dimensions are applicable for disaggregation (e.g. number of countries of operations, etc.).  As a reminder, it is worth noting that the number of datapoints identified through IG3 is related to: ⭕ the treatment of narrative information (more than 50%), for which the ESRS provide a detailed structure of content in order to foster relevance and comparability; ⭕ the onboarding of information (approx. 15%) required under other EU regulations (SFDR, Pillar III, Benchmarking, EU Climate Law). Download the IG 3 Technical adjustments here: https://lnkd.in/d_Zd3Eub --- Stay tuned for more CSRD and ESRS insights. ✅ Adopt a streamlined, digital and taxonomy-centric ESRS report preparation with www.cleeritesg.com #getCSRDready, #CSRD, #ESRS, #CSDDD, #ESG, #Strategy, #Governance, #SustainabilityReporting, #Digitalisation, #CleeritESG

On December 19, EFRAG released new Explanations on its Q&A platform, answering five environmental questions to support preparers and others in the implementation of the ESRS. These Explanations will later be added to the next major update to the Compilation of Explanations expected to be released in Spring 2025.    ⭕ E4 – Biodiversity and ecosystems If the topic ‘biodiversity and ecosystems’ has been identified as material for the undertaking’s upstream (or downstream) value chain only – and not for the company’s own operations, the undertaking: ➡️ (DP 16.a) would not disclose the information list of material sites since this datapoint refers to own operations only ➡️ (DP 16.b) would be required to disclose the information whether it has identified material negative impacts with regards to land degradation, desertification or soil sealing, as this datapoint applies not only to impacts connected to the undertaking’s sites in its own operations ➡️ (DP 16.c) would not disclose the information whether it has operations that affect threatened species, since this datapoint refers to own operations and not to operations in the upstream or downstream value chain. ➡️ In addition, the DR E4-5 “Impact metrics related to biodiversity and ecosystems change” only reflects own operations, as no coverage of the value chain is required. (IG 2 Value chain specifies in its ‘VC coverage map of ESRS Set 1’ on page 44) ⭕ E1 – Climate Change (financial institutions) Scope 3, category 15 (Investments) targets for the lending portfolio are considered value chain information. When only targets in intensity value are available, in the first three years of reporting, a financial institution may limit the information on value chain targets to the information available in-house, which might include data already collected for Pillar 3 reporting. Download the December 2024 explanations here: https://lnkd.in/diNJ5RCC --- Stay tuned for more CSRD and ESRS insights. ✅ Adopt a streamlined, digital and taxonomy-centric ESRS report preparation with www.cleeritesg.com #getCSRDready, #CSRD, #ESRS, #CSDDD, #ESG, #Strategy, #Governance, #SustainabilityReporting, #Digitalisation, #CleeritESG

Merry Christmas from Team Cleerit! Joyeuses Fêtes ! God Jul!