EFRAG and CDP cooperate to drive uptake of European reporting standards

EFRAG and CDP announced a partnership to accelerate adoption of the European Sustainability Reporting Standards (ESRS), with CDP aligning its disclosure system to the ESRS using EFRAG's technical guidance. With ESRS applying to roughly 50,000 businesses from January 2024 and extending to non-EU firms, Indian companies in EU value chains may face new disclosure requests.

EFRAG and CDP joined forces to accelerate adoption of the European Sustainability Reporting Standards (ESRS), adopted by the European Commission on 31 July 2023. CDP will align its disclosure system with the ESRS, supported by EFRAG's technical expertise and guidance, and will offer webinars and detailed technical materials to help companies report ESRS data points through the CDP platform. CDP is currently used by over 23,000 companies. The ESRS cover climate change (E1), pollution (E2), water and marine resources (E3), biodiversity (E4), and resource use and circular economy (E5).

Starting in January 2024, the ESRS apply to approximately 50,000 businesses and will eventually extend to a substantial number of non-EU-based businesses. Companies worldwide, including those in supply chains of EU firms, will need to consider requesting information about their value chains. The standards adopt a double materiality approach, requiring companies to report both how climate and environmental changes affect their operations and how they impact people and the planet. The ESRS align with the ISSB's IFRS S2 climate standard and with GRI standards.

Companies preparing to report should monitor the webinars and technical guidance materials CDP will roll out with EFRAG's support to report ESRS data points through the CDP platform. Firms inside and outside the EU should assess their exposure to ESRS obligations under the CSRD and prepare for value-chain information requests. Reporters should also track ongoing alignment work between ESRS, IFRS S2, and GRI standards to manage overlapping disclosure requirements as the regulation phases in from January 2024.

Key figure — ESRS scope: approximately 50,000 businesses from January 2024