EuropeanIssuers Advisory Council Questions to Mairead McGuinness, EU Commissioner for
Financial services, financial stability and Capital Markets Union
20 April 2021
14.00 15.30 (CET)
1) The majority of companies are aiming to adopt a renewed focus on climate change and
sustainability within the next three years. How can business help national governments and
the European Commission to plan and generate an innovative and resilient growth for the EU
economy post-COVID 19?
2) The EU economic recovery plan includes own resources proposals, such as digital services tax
and carbon border adjustment, that may be viewed as contentious from the perspective of
ential impact of these suggested
measures on trade relations with the US and China? What wil you do to ensure the EU
remains attractive for international business?
3) The Financial Times has estimated that there are at least 230 corporate sustainability
standards initiatives across more than 80 sectors not to mention initiatives from multiple
governments and international organisations promoting just climate change reporting. No
global standard has yet emerged, which is what we al need. It is clear to see that the diversity
and voluntary nature of these disclosure frameworks create chal enges and present risks and
scope for cherry picking and greenwashing. What are in your view the next steps to overcome
the fragmentation of different reporting standards requirements? Unclear and multiple
standards at EU and international level would bring additional administrative burdens for
companies and a lack of comparability for investors.
4) According to the information appeared in the press, the Commission is going to extend the
-
you think that this could disincentivize SME to get listed at a time when the recapitalization
through public markets seems to be the only way out from
be better to foresee an opt-in mechanism for such firms, giving them the choice whether
complying with NFR disclosure, based on their needs (attracting ESG investments), on one
side, and on their capacity to meet the regulatory requirements, on the other side?
5) While we see the need for higher comparability of Non-Financial information, we wonder that
a too rigid standardization, including the provision of a digital format, would reduce the
necessary flexibility to address stil open issues concerning the relationships between
corporate activities and its externalities and to meet evolving expectations by investors and
other stakeholders. The risk is that the European standards, if imposed through mandatory
rules, can become quickly out- of-
-
law tools to enhance comparability and standardization in a dynamic perspective?
6) Could you explain in more details the notion behind the obligation to use a machine-readable
template to report NFI? As far as this obligation is deemed to ensure a better (cross-sectoral)
comparability of NFI, we believe this to be difficult to achieve since business models and NFI
related thereto differ to a significant degree across sectors/industries.
7) As far as we are aware, one of the objectives of the NFRD-review is to achieve a maximum
European harmonisation of non-financial reports. Against the background that a vast number
of European companies pursue a business model, which is based on global operations: what
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EuropeanIssuers Advisory Council Questions to Mairead McGuinness, EU Commissioner for
Financial services, financial stability and Capital Markets Union
20 April 2021
14.00 15.30 (CET)
can the EU possibly do to achieve not only a European but a global harmonisation of non-
financial reporting as best as possible?
8)
-financial reporting standards by EFRAG somehow cumbersome
since a change of the statutes and the governance of EFRAG, which is not a standard-setter in
on an profoundly
experienced and reputable international standard-setter such as the IFRS-Foundation also
from the background that this would ensure the new standard to be embedded into an
international standard setting environment known and familiar to European companies
operating international y to a significant degree?
9) Col ecting ESG non-financial information from large corporates may prove to be a chal enge,
as clients may be reluctant to provide the appropriate ESG information. They may view it as
an extra reporting burden. This factor may influence the quality of reportable information.
The European Banking Authority (EBA) is proposing a sequential approach for the
implementation of the prudential disclosure requirements under Article 449a Capital
Requirements Regulation (CRR), starting with quantitative information on climate change
related risks, including transition and physical risks, the implementation of a Green Asset Ratio
(GAR) on EU taxonomy aligned activities, which translate the Paris agreement, as wel as
quantitative information on other mitigating actions, and qualitative disclosures for
environmental, social and governance risks.
Query if there wil be sufficient time to al ow Banks to better prepare for calculating and
reporting t
of the deadline for the Green Asset Ratio reporting obligation or alternatively the
promulgation of a provision for a transition period?
10) Currently, Smal and Medium Enterprises are not required to report on ESG matters as they
are not subject to the Non-Financial Reporting Directive (NFRD). This constitutes a bigger
chal enge in gathering relevant data from this segment and may put an undue burden on
Financial Institutions in their efforts to calculate their portfolio Green Asset Ratio.
Has the Commission decided on how this issue should be addressed?
11) The growing demand for ESG disclosures in the EU under a range of directives, regulations,
delegated acts etc, often entailing overlapping and complex criteria and indicators, has
created a regulatory burden for the reporting entities while the diversity of approaches
heightens the confusion amongst stakeholders and other interested parties, like regulators,
rating agencies and the investment community at large.
It transpires that there is a need for simplification/standardization to make ESG reporting
comparable and meaningful to preparers and to other stakeholders.
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EuropeanIssuers Advisory Council Questions to Mairead McGuinness, EU Commissioner for
Financial services, financial stability and Capital Markets Union
20 April 2021
14.00 15.30 (CET)
How wil the EU reporting requirements align with international initiatives to create a
consistent ESG reporting framework?
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