The European Financial Reporting Advisory Group (EFRAG) and the International Sustainability Standards Board (ISSB) don’t always seen eye to eye. However, despite differences in approach between the two, they both seek interoperability between their standards. This resulted in successful interoperability mapping in 2024. However, as both standards evolve, EFRAG is encouraging the ISSB to enhance interoperability further. In a response letter to recent SASB exposure drafts EFRAG notes that:
“Another highlighted objective of the consultation is the enhancement of the interoperability with other sustainability-related standards and frameworks. We note that some of the provisions in the SASB standards may not be compatible or interoperable with ESRS, EU law or other standards, which can result in inconsistencies and increased cost of reporting.”
The goal of interoperability is not to fully align both standards. Instead, it is to allow for the most overlap possible, reducing the need for duplicative work by reporters subject to both frameworks. Ironically, recent simplification measures in the CSRD/CSDDD omnibus reforms may set back the interoperability of the European Sustainability Reporting Standards (ESRS). It is encouraging, nonetheless, to see EFRAG continue to focus on interoperability and easing the reporting burden for multinationals that report under both standards.
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