Last updated: 08 Aug 2022 03:38 Posted in: AIA
AIA has responded to the European Commission’s proposals outlining the adoption of EU Sustainability Reporting Standards (ESRS) linked to a Corporate Sustainability Reporting Directive (CSRD).
Many SMEs, and the SMPs supporting them through the provision of advisory, accounting and assurance services to them, stand to be impacted directly or indirectly, by the CSRD and EFRAG’s ESRS. Our response is focused on the impact and implications for SMEs and SMPs. And our response is principle-based.
In submitting our response we have collaborated with other members of the European Federation of Accountants and Auditors for SMEs (EFAA), with particular input from the Accounting, Assurance and EU Professional Regulation Expert Groups.
The European Federation of Accountants and Auditors for SMEs (EFAA) represents accountants and auditors providing professional services primarily to small and medium-sized enterprises (SMEs) both within the European Union and Europe as a whole. Constituents are mainly small practitioners (SMPs), including a significant number of sole practitioners. EFAA’s members, therefore, are SMEs themselves, and provide a range of professional services (e.g., audit, accounting, bookkeeping, tax, and business advice) to SMEs. EFAA represents 15 national accounting, auditing, and tax advisor organisations with more than 380,000 individual members.
AIA Director of Operations David Potts said, “Working with other professional bodies through EFAA provides real leverage for members across Europe and beyond; together we are committed to supporting the role of SMPs and SMEs. In this consultation response we had real concerns that the proposed standards would create a disproportionate burden for SMEs and made recommendations for improvement whilst maintaining the core function of the sustainability reporting standard.”
AIA plays two distinct roles in promoting green finance and sustainability. As a professional body we are committed through our policy agenda to act as an authoritative voice within the accountancy sector to raise standards and education in green finance and sustainability. We also ensure that our members have the skills, knowledge and tools to promote sustainable business practices.
The government, the Green Finance Institute, and a number leading financial professional bodies, including AIA, are signatories of the green finance education charter, designed to embed green finance and sustainability into the core curricula, new qualifications, and the continued professional development of accountants.
Each of the signatories acknowledge the collective responsibility of the global community including the banking, finance and professional services sectors to deliver Article 2.1c of the Paris Agreement and the UN Sustainable Development Goals.
The proposal for a CSRD requires that EFRAG’s Technical Advice is prepared with ‘proper due process, public oversight and transparency, and with the expertise of relevant stakeholders, and it is accompanied by cost-benefit analyses that include analyses of the impacts of the Technical Advice on sustainability matters’, contributing to the delegated acts through which the ESRS will be adopted in the EU.
In order to meet the ambitious deadlines for submitting the first set of draft ESRS to the European Commission by November 2022 and to benefit from the longest public consultation period possible, the EFRAG SRB launched a public consultation on the basis of the EDs prepared under the sole responsibility of the PTF-ESRS.
These EDs correspond to the first set of standards required under the CSRD proposal and cover the full range of sustainability matters: environment, social, governance and cross-cutting standards.
The EFRAG SRB and the EFRAG SR TEG will consider the EDs in parallel with the public consultation and following the handover by the PTF-ESRS. Together with the input and results from the public consultation, the EFRAG SRB supported by the EFRAG SR TEG will agree the final first set of draft ESRS to be submitted to the European Commission.
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“Working with other professional bodies through EFAA provides real leverage for members across Europe and beyond; together we are committed to supporting the role of SMPs and SMEs. In this consultation response we had real concerns that the proposed standards would create a disproportionate burden for SMEs and made recommendations for improvement whilst maintaining the core function of the sustainability reporting standard.”