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With so many new ESG standards and regulations announced in 2023, many fear that disclosures would be incomparable and inconsistent. Thankfully, this “year of interoperability” marched forward when CDP announced an agreement to maximize alignment with the European Sustainability Reporting Standards (ESRS).
Under the agreement, CDP and the European Financial Regulation Action Group (EFRAG – which developed the ESRS) will create technical guidance for the 23,000 companies that currently report to CDP. The guidance will help these companies report on the ESRS data points through the widely used CDP questionnaire.
This change comes in a nick of time as the EU Corporate Sustainability Reporting Directive (CSRD) will require about 50,000 companies (including 10,000 non-EU companies) to report using the ESRS starting next year.
Maxfield Weiss of CDP Europe said, “With the bar now being raised globally in respect to environmental disclosure, our collaboration with EFRAG will ensure companies preparing to report can do so through CDP.”
Both the EFRAG and the CDP previously announced alignment and interoperability with the standards from the International Sustainability Standards Board (ISSB) and the Global Reporting Initiative (GRI). Plus, with another announcement this week between GRI and ISSB that they are opening a joint Sustainability Innovation Lab (SIL), which ISSB Chair Emmanuel Faber said will “make it straightforward for companies using both the IFRS Sustainability Disclosure Standards (ISSB) and the GRI Standards,” the reporting landscape looks more cohesive than ever.
Important Agreements Ahead of COP 28
More good news, with only three weeks before the COP28 meeting in Dubai, a deal was reached for a ‘loss and damage fund’ to help the world’s poorest countries impacted by climate change. The 24 nations involved agreed to encourage, but not mandate, all countries to add to the fund. The deal will be finalized at COP 28 in December.
“There was a lot at stake at this meeting,” said Barbados delegate Avinash Persaud, “The value of the agreement is that it avoided a disaster ahead of COP and gives positive momentum.”
Plus, China has published its highly anticipated methane reduction plan in a move that could signal closer climate ties with the US, ahead of a meeting between China’s leader Xi and President Biden next week.