ACCA (the Association of Chartered Certified Accountants) Hong Kong hosted a Fireside Chat on 5 March, bringing together influential standard setters and sustainability leaders to discuss the EU Corporate Sustainability Reporting Directive (CSRD), which sets the legal framework of a broadened scope of reporting obligations since early 2023, and the European Sustainability Reporting Standard (ESRS), which sets out the roadmap for compliance and will apply from 1 January 2024 as required by the CSRD, with the first ESRS-compliant report to be published in 2025.
Esteemed sustainability leaders including Hans Buysse, Administrative Board President of the European Financial Reporting Advisory Group (EFRAG), and Alexander Bassen, Chair of the Independent Standards Board (ISB) of the Greenhouse Gas Protocol (GHGP) and Member of Sustainability Reporting Board of EFRAG, accompanied by other board members of the European Federation of Financial Analysts Societies (EFFAS), engaged in insightful exchanges with Hong Kong-based ESG experts.
Despite being an EU directive, non-EU businesses identified as in-scope companies will be required to report under the CSRD. The discussions centered around the preparations required for non-EU companies and explored the interoperability of ESRS with the International Sustainability Standards Board (ISSB).
In her welcome address, Ada Leung, Director of ACCA China highlighted the significance of the EU CSRD and the need for businesses to embrace sustainable practices. 'The CSRD marks a significant milestone in the evolution of sustainability reporting in the EU. It is part of the broader EU efforts to promote a more sustainable economy and improve the integration of environmental and social factors into corporate decision-making processes.'
Ada also addressed the challenges faced by businesses in implementing sustainability plans, while she expressed optimism about the potential for change and emphasized the crucial role of accounting professionals in driving sustainable practices. 'ACCA believes that the accountancy and finance profession can step up to ensure the delivery of sustainability objectives – both in terms of reporting the progress made and in helping organizations make the strategic decisions to deliver against the dual aims of a sustainable transition and business performance,' she stated.
Hans Buysse, EFRAG Administrative Board President said: 'ESRS is now a law in Europe, impacting not only 50,000 EU companies but also 10,000 foreign companies with operations within the EU. While the objective of the ESRS is never merely about achieving regulatory compliance and avoiding penalties, it also presents a significant opportunity to contribute to global sustainability goals.'
'Numerous academic studies have already demonstrated the value creation associated with the implementation of ESRS topics. While there will be costs and impacts for companies, the benefits of complying with these standards are noteworthy. By adhering to the ESRS, companies automatically align not only with the International Sustainability Standards Board (ISSB) but also with the majority of the Taskforce on Nature-related Financial Disclosures (TNFD),' Hans added.
Alexander Bassen, Chair of the Independent Standards Board (ISB) of GHGP, encouraged our Hong Kong-based professionals to embrace the ESRS as a strategic tool for long-term success.'ESRS encompasses a broader range of environmental factors, including biodiversity, water resources, circular economy, just to name a few. By starting with the ESRS, businesses in Hong Kong can proactively prepare for future demands. Considering Hong Kong's position as a financial hub and its comparison to other cities in the Greater Bay Area, Singapore, or Japan, adopting the ESRS will undoubtedly provide a competitive advantage, as it aligns with the future requirements of sustainable reporting.'
ACCA Hong Kong is committed to empowering its members and stakeholders in navigating the evolving reporting landscape and driving sustainable practices. With its unrivaled global network and forward-looking mindset, ACCA plays a pivotal role in facilitating knowledge sharing and idea exchanges. We take immense pride in bringing together subject-matter experts from the EU, who stand at the forefront of advancing and standardizing sustainability reporting practices, to share their expertise with our stakeholders in Hong Kong. By connecting global sustainability leaders and fostering dialogue on crucial topics, ACCA Hong Kong is paving the way for a better future.
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