Last November, the Ministry of Justice and Security published a public consultation on the Implementation Decree on the Sustainability Reporting Directive. This transposes part of the Corporate Sustainability Reporting Directive (CSRD) into national laws and regulations. On December 18, 2023, we responded to the consultation together with our members.
Clarifying the scope of the CSRD
We think it is important that in the national implementation of important European legislation, such as the CSRD, it is clear to the industry what exactly is expected from whom. Therefore, in our response to the first consultation on CSRD implementation, we asked for more clarity on a few points.
Meanwhile, in the Explanatory Memorandum (NvT), the legislator informed that individual asset management does not fall within the scope of the implementation decree. In addition, more has been included about the definition of "public interest organization" worked. In this consultation response, we requested further clarification on the first point - in the case of investment fund managers and UCITS managers managing individual assets.
Interpretations of the scope of reporting requirements.
Because terms such as "own operations," "value chain," and "products and services" are not defined clearly enough in the draft Implementation Decision, the scope of the reporting requirements could potentially be interpreted broadly. This may cause ambiguity in practice, for example in the case of individual asset management which falls outside the scope of the Implementation Decree.
Therefore, in our response we also ask for further clarification of the limited scope reporting for trustees, in addition to reporting that looks at their own corporate entity and the European Sustainability Reporting Standards (ESRS) reporting standards. In addition, we stress that the materiality analysis can only be performed after the scope determination in order to avoid an overly extensive scope determination or discussion with the auditor.
Sustainability reporting and the general meeting of shareholders
The European legislator hints that it actually considers sustainability reporting as important as financial statement reporting. This is particularly evident in the provisions of the assurance test that applies to both components, although initially the lighter version of the degree of assurance provided will apply to sustainability reporting.
DUFAS considers sustainability reporting to be an important component. For this reason, we find it desirable that the sustainability report be adopted and submitted to the general meeting. This will also bring it more in line with the legally required accountability of the financial statements. The board then accounts for its sustainability performance to the general meeting. The shareholder can then respond and vote on this.
