As of today, two options of standards are relevant for our clients:

• If the clients are operating on a national level, as a basis, they should use the national sustainability standards. I assume that there are national sustainability standards in most EU member states. In Germany, for example, there is the Sustainability Code (“Deutscher Nachhaltigkeitskodex”, DNK). This Code can also be used in other countries if, for example, there are no sustainability standards on a national level;
• If the clients are active in the international market, as a basis, they should use the Global Reporting Initiative (GRI) standards. The GRI are much more complex than the German Sustainability Code standards.

Currently, two sets of standards are being developed, which our SMEs clients will be able to use for voluntarily reporting in the future:

• On a European level, the European Financial Reporting Advisory Group (EFRAG) will be responsible for developing the EU Sustainability Reporting Standards (ESRS). The first set of draft standards are to be available for review by mid-2022 and are to be adopted no later than October 31, 2022. For small and medium-sized enterprises (SMEs) listed on regulated markets, a separate proportionate version of the standards is to be prepared. These proportionate standards may be chosen for our SMEs clients;
• In parallel, the IFRS Foundation is also developing sustainability standards, which would apply to companies operating at global level. As we already saw, the new International Sustainability Standards Board (ISSB) was recently founded for this purpose.

In summary, for now, I would suggest for most of our SME clients make use of the national standards, as long as they are more flexible and more concise than the GRI standards.

Should you ever lose track of the big picture, my colleagues and I from the AGN EMEA Accounting, Auditing & Education Committee (AAEC) will be happy to help and guide you safely through the IFRS and CSR jungle. As a member of AGN International, you can make use of the AGN AAEC Helpline at any time or contact me by email at [email protected] or by mobile phone at +49 173 8710322. 

Happy accounting,
Carsten

Carsten Ernst Managing Partner at Wirtschafts Treuhand Group, Stuttgart, Germany
		- Serves as accounting counsel focused on International Financial Reporting Standards (IFRS) - Provides AGN members with support in the context of specific transactions - University Degree in Business Administration		- German Public Auditor and Tax Consultant - Member of the following AGN bodies: EMEA Board of Directors (Vice-Chairman), EMEA AAEC Accounting and Auditing Committee (Chairman) and IACC International Auditing and Accounting Committee

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