EU Authority advises companies: Establish systems for ESG data collection and analysis

The European Securities and Markets Authority (ESMA) has issued a public statement regarding the initial application of the European Sustainability Reporting Standards (ESRS). This statement aims to help companies prepare for the new sustainability reporting and oversight requirements under the EU’s Corporate Sustainability Reporting Directive (CSRD), with the first reports set to begin next year.

One of the key recommendations in the report is a call for companies to "carefully establish their systems for data collection and analysis, as well as internal controls," to comply with the detailed reporting requirements of the ESRS and to conduct double materiality assessments. The regulator emphasized that even companies with experience in sustainability reporting under previous regulations should assess whether their existing systems are still adequate for the CSRD.

The CSRD regulations provide a three-year transition period for companies that are unable to obtain information from their upstream and downstream value chains. In the report, ESMA encourages companies to conduct gap analyses regarding value chain information to enable continuous improvement at the start of reporting, and reminds companies that "the ESRS does not foresee cases where the absence of data justifies the omission of material information disclosure."

The European Securities and Markets Authority (ESMA) is an independent EU authority focused on enhancing investor protection and promoting stable, orderly financial markets.

Click here to access the reports.