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Feedback of different supervisory authorities to the ESRS

In November 2022, European Financial Reporting Advisory Group (EFRAG) published the first edition of the European Sustainability Reporting Standards (ESRS), which was endorsed by the European Supervisory Authorities, ESAs (ESMA, EBA, and EIOPA).

They also provided overall good feedback on the revised draft ESRS, with certain topics that may still be improved. The ESRS aims to establish a coherent European sustainable reporting standard to meet global sustainable development goals and promote the development of ESG standards.

European Securities and Markets Authority – ESMA (link)

According to the ESMA, ESRS can protect investors without affecting financial stability, and ESRS Set 1 broadly accomplishes the objective of protecting investors without compromising financial stability.


However, there are some points that, in the opinion of ESMA, should be modified:

  1. Additional explanatory material should be provided to support users of sustainable standards at the transition stage, for that EFRAG should work with regulators to develop a standardized European process,
  2. Financial entities should be given priority in the development of sustainable reporting standards since their investments and financing activities are directly related to those of other enterprises and
  3. For smooth promotion of the new standards, EFRAG should contact the executive departments of all member countries in Europe.

“The first ESRS draft launched by EFRAG is a major achievement. These standards will improve the consistency and quality of information across the value chain of sustainable investment. They will also enable European companies to take broader responsibility for their sustainability commitments and their impact on retail investors.” - Commented by ESMA 


European Insurance and Occupational Pensions Authority – EIOPA (link)

According to the EIOPA, ESRS can promote high-quality, sustainable information disclosure and is compliant with international standards. Nevertheless, they noted that:

  1. The ESRS should provide specific guidance for insurance companies and pension funds,
  2. The ESRS should be aligned with ISSB’s sustainability reporting standards to avoid diverging standards and additional reporting efforts
  3. In order to improve the efficiency of implementation, ESRS should provide a brief guide covering all processes and
  4. Enterprises with low sustainability risks should be able to adopt simplified sustainability reporting standards under ESRS.

European Banking Authority – EBA (link) 

Although a few aspects deserve further consideration, the EBA believes that the draft ESRS is a good starting point to apply the reporting requirements of the Corporate Sustainability Reporting Directive (CSRD). One focus point of EBA is the interoperability of draft ESRS with the EBA Pillar 3 disclosure, as well as the data that credit institutions need from a risk management perspective. 


According to the EBA, ESRS is generally compliant with relevant EU and global regulations, they also noted that:

  1. It is important that EFRAG’s and ISSB divergent timetables are taken into account
  2. The disclosure of the financial industry should be reworked more directly for accuracy,
  3. The industry standards, which need to be finalized, should meet regulatory requirements and
  4. ESRS should establish a mechanism to explain problems during implementation.

The European Commission will consider the ESA's feedback and plans to adopt the standards into delegated acts by 30 June 2023.

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