Sustainability Disclosure: Is there hope for EU & US standards to converge?​

16 May 2022

Sustainability Disclosure: Is there hope for the EU and the US standards to converge?

Ingmar Juergens, CEO & Co-founder, Climate & Company

Sustainability Disclosure Regulations: A lot is happening SEC1 (USA) and CSRD2 (EU) proposals 3 open consultations

A chance for international alignment?

1 Securities

and Exchange Commission 2 Corporate Social Responsibility Directive

2

How well aligned are the current proposals?

CSRD Proposal

SEC Proposal

• All sustainability dimensions: environmental, social, governance

• Climate-related risks, events, transition

• Beyond climate

• Detail for climate-related targets/ commitments • Emissions scope 1-3

• All large and listed companies in the EU

• US-listed firms

• Simplified reporting for SMEs

• Lower requirements for smaller listed firms

• Phase-in depending on company size

• Phase-in depending on companysize 17.05.2022

3

How well aligned are the current proposals?

CSRD Proposal

SEC Proposal

• Double materiality

• Financial materiality

• Limited assurance

• Limited assurance Scope 1 and 2 emissions

• Objective: similar level of assurance than for financial information

• After transition period: reasonable assurance

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4

How well aligned are the current proposals?

CSRD Proposal

SEC Proposal

• European Sustainability Reporting Standard (ESRS)

• Based on TCFD and existing U.S. reporting requirements

• Annual report

• Annual report and registration statements

• Digital tagging

• Digital tagging

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5

What about the rest of world?

Worldwide trend towards mandatory disclosure

Most jurisdictions outside Europe: financial materiality China signals future adoption of ISSB standards G20 supports development of global baseline by ISSB

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6

Further Insights in our Publications

You can find these and more publications on our website: www.climateandcompany.org 17.05.2022

7

Thank you for your attention!

IF WE ARE SERIOUS ABOUT SUSTAINABLE DEVELOPMENT, WE NEED TO GET THE FINANCING RIGHT.

The Sustainable Finance Think Tank

climateandcompany.org hello@climcom.org