EU CSRD: Economy for the Common Good is now an EFRAG member

The European Financial Reporting Advisory Group (EFRAG) has Common Welfare Economy inducted as one of 13 new affiliates participating in the Revision ofCorporate Sustainability Reporting Directive (CSRD) of the EU.

The Economy for the Common Good (GWÖ) joins the EFRAG and will support it in the future in the area of ​​sustainability reporting as an organization of civil society. The EFRAG – a non-profit organization based in Brussels – prepares the standards for the revision of the CSRD on behalf of the EU Commission.

“The common good matrix and the common good balance sheet based on it should serve as an effective tool for the development of reporting standards within the framework of the revision of the CSRD. This is a historic opportunity for a truly sustainable transformation of our economy that we should not miss,” explains Gerd Hofelen, Economy for the Common Good representative at EFRAG.

EFRAG advises the European Commission on its sustainability reporting activities with drafts, cost-benefit analyzes and impact assessments. It gathers input from all stakeholders and collects insights into specific European realities throughout the standard-setting process. 

The GWÖ provides reporting and assessment tools that support value-oriented companies in their sustainability reporting. The common good balance sheet based on the common good matrix and the common good product are defined as instruments by key performance indicators relating to human dignity, solidarity, social justice, ecological sustainability, transparency and participation. 

The existing draft of the EU Commission offers a solid basis for the further development of the NFRD (Non-Financial Reporting Directive) to the CSRD (Corporate Sustainability Reporting Directive), but should be improved by the European Parliament and the European Council. The aim must be to contribute to the Green Deal, the SDGs and compliance with planetary boundaries through effective sustainability reporting. 

In order to achieve these goals, the Economy for the Common Good has formulated the following demands:

• The obligation to report on sustainability should at least apply to all companies that are required to report financially. According to the EU Commission's proposal, only around 49.000 of 22,2 million companies are covered by the legislation. Small and medium-sized enterprises (SMEs) account for two-thirds of jobs in the EU and generate more than half of our gross domestic product (GDP). It would be a mistake to exempt half of Europe's economic output from the obligation to report on sustainability.
• Sustainability reporting should lead to quantifiable and comparable results that are visible on products, marketing materials and in the business register (including the infrastructure of the future European Single Access Point) so that consumers, investors and the general public can get a holistic picture of get the company.
• As with financial reports, the content of sustainability reports should be audited and given an “unqualified opinion” by external auditors with expertise in non-financial, ethical and sustainability reporting.
• The sustainability performance of companies should be linked to legal incentives, from priority in public procurement and economic development to differentiated financing conditions and differentiated access to the world market, in order to use market forces to promote social values ​​and give responsible companies a competitive advantage.

The 13 organizations that have been added to the EFRAG Expert Pool as members, in addition to the 17 existing stakeholders, are:

European Stakeholders Organizations Chapter: EFAMA and European Issuers

Civil Society Organizations Chapter: The Climate Finance Fund of the European Climate Foundation, Economy for the Common Good, Environmental Defense Fund Europe, Frank Bold Society, Publish What You Pay, Transport & Environment, WWF; BETTER FINANCE, Finance Watch, European Trade Union Confederation (ETUC) and European Accounting Association complete list of the EFAMA (sector asset management).

The EFRAG General Assembly will take place in February and March 2022. The Corporate Sustainability Reporting Directive (CSRD) is scheduled for adoption in October 2022. The companies covered by the directive will have to submit sustainability reports for the 2024 financial year for the first time in 2023.

For more information, visit austria.ecogood.org/presse