ESMA issued final report on Guidelines on enforcement of sustainability information (GLESI), statement on application of EU Sustainability Reporting Standards (ESRS).
Documents will support consistent application and supervision of the requirements.
Aim to promote EU capital markets as hub for green finance and improve supervisory consistency among EU national authorities, via better cooperation and convergence.
Follows ESMA Dec. 2023 sustainability report supervision proposals, see #195128.
Guidelines
ESMA consulted on draft guidelines in Dec. 2023, final report includes feedback to the consultation, any changes made as a result and the finalized version of the guidelines.
The GLESI apply to all competent authorities, comprise 22 guidelines grouped into 6 main areas: basic concepts; enforcers' internal organization; selection; examination; enforcement actions; European coordination; authorities must make effort to comply.
Apply re enforcement of sustainability information to ensure that such information provided by issuers, who have securities admitted to trading on a regulated market, and who must publish sustainability information, comply with Transparency Directive.
The guidelines are principles-based, define enforcement of sustainability information and its scope, set out characteristics enforcers should possess, enforcement action.
Public Statement
The public statement on the first application of ESRS highlights elements of guidance by EU CMSN and EFRAG, and key areas of attention re ESRS sustainability statements.
These are: establishing governance arrangements and internal controls that can promote high-quality sustainability reporting; properly designing and conducting the double materiality assessment and ensuring there is transparency about it.
Being transparent about use of transitional reliefs; a clearly-structured sustainability statement; creating connectivity between finance and sustainability information.
ESMA highlights importance of issuers conducting continuous training on ESRS and dialog with industry peers on issues of common relevance, as well as with auditors.
Statement targets large listed issues, ESMA will issue reporting priorities later in 2024.
Next Steps
The guidelines will be translated into official EU languages, issued on ESMA website.
National authorities will then have a 2-month period to notify ESMA re compliance.
Guidelines apply to enforcement of sustainability information issued from Jan. 1, 2025.
ESMA will continue to monitor sustainability reporting practices in 2025, application of the GLESI, and in Q4 2024 release recommendations re sustainability statements of listed companies in public statement on 2024 EU Common Enforcement Process.
Regulators
EU ESMA
Entity Types
Auditor; B/D; Corp; Inv Co
Reference
St ESMA32-992851010-1597, Rp ESMA32-992851010-1600, PR, 7/5/2024; TD Dir 2004/109; CSRD Dir 2022/2464; ESG
