As Member of the EFRAG, the EACB welcomes the possibility to comment on the consultation document on the EFRAG ad personam mandate on non-financial reporting standard setting.
Although we supports the proposed EFRAG governance chart and new structure that envisages the two-pillar approach to deal with non-financial reporting standards alongside the current pillar dealing with financial reporting (as it was already suggested during the first consultative process), we believe it should be however necessary to better clarify the functional distinctions between the EFRAG Board in charge of Governance and the two Boards. In order to guarantee interconnectivity between the Financial Reporting Board and the Non-Financial Reporting Board we believe that a possible solution could be to appoint some members of the FR Board observers of the NFR Board and vice versa, strengthening in this way the cooperation between the two bodies.
With regard to non-financial reporting, the EACB believes that in addition to the stakeholders currently members of EFRAG, other players are relevant and may be willing to join EFRAG and become fully involved in the standard setting preparatory process. Nevertheless, the EACB insists on the need to hugely involve banking association due to the fact that non-financial reporting could represent a challenge for banks according to the reporting requirements that are being developed under the new legislative provisions. We believe that banking associations already members of the EFRAG should be efficiently involved in each level of the governance of the new non-financial pillar (NFR Board, NFR TEG and NFR WGs). The same should occur for the relevant existing standard setter organizations.
We support EU leadership in NF reporting standard setting as a solution is needed in the short term (according to the European sustainable finance legislative framework) although this will represent an interim answer with the aim to stimulate and accelerate the process to create a worldwide recognized NFR standard (possibly based on the European proposal). To better guarantee an alignment between the different international non-financial reporting initiatives and the EFRAG future activities, we believe that IASB could be appointed as observing members of the Non-Financial reporting Board of the new structure.
A deeper analysis is included in the EACB position paper here attached.
For further information or questions please contact:
Ms. E. Bevilacqua (email@example.com)
Mr. G. Betti (firstname.lastname@example.org)