FERMA is pleased to have the opportunity to provide the European Commission with feedback from the risk and insurance management community on its proposal for a Corporate Sustainability Reporting Directive (CSRD).
As the EU-level representative of the risk management profession FERMA has an important voice on the topic of sustainability. The task force on climate-related financial disclosures (TCFD) recommends focusing on four thematic areas of how organisations operate: governance, strategy, metrics and targets, and risk management. How organisations identify, assess and manage climate-risks (i.e. risk management) is a key part of their strategies, and essential for ensuring both sustainability and resilience.
Furthermore, risk and insurance managers regularly both produce and use sustainability information on behalf of their enterprises.
This therefore means that a revision of the requirements for reporting on sustainability information directly impacts both our profession, as well as the way that information is produced.
Bearing the above in mind, FERMA wishes to express its support for the Commission’s ambitious CSRD proposal but makes the following comments, summarised below and expanded in below position paper:
- While we wholeheartedly agree that companies should do ‘double materiality’ sustainability reporting, we are concerned by the quantity-quality tradeoff, especially when problems exist currently with application of double materiality.
- FERMA supports an expansion of the scope, however, we have two concerns with this: i) timing, and ii) knowledge-gaps.
- FERMA welcomes the proposal for a common standard on sustainability reporting to be developed but urges that this work is led by industry.
- ‘Going digital’ is welcome but those reporting will likely need some guidance on the process.
- Quality assurance is indeed desirable, however, we hope the ‘standard’ will mirror the reporting standard.