ASCG comment letter on EFRAG drafts of two XBRL taxonomies

On 8 April 2024, the ASCG submitted its comment letter to EFRAG on the draft XBRL taxonomy for Set 1 of the European Sustainability Reporting Standards (ESRS, Delegated Regulation (EU) 2023/2772). The comment letter also includes comments on the draft XBRL taxonomy for reporting in accordance with the Taxonomy Regulation (Delegated Regulation (EU) 2021/2178) and on the tagging rules still to be developed by ESMA. Feedback was provided to EFRAG via a web-based questionnaire and in the form of a comment letter with identical content, which was brought to the attention of the EFRAG Sustainability Reporting Board.

In its comments, the ASCG calls in particular for:

• Tagging one data point with several taxonomy elements should be avoided as far as possible, as such multi-tagging is time-consuming for preparers.
• ESMA should only require the use of certain mandatory elements in the future RTS amending the ESEF Regulation instead of making the full scope of the taxonomy elements mandatory.
• Regarding the disclosure of tagged information, preparers should not have to fulfil more reporting requirements than required by the ESRS or Article 8 provisions.
• Users of a human-readable format of sustainability reports should not be better (or worse) off in terms of information content than users of the machine-readable inline XBRL (iXBRL) format.
• Reasonable transition periods should be granted, as the tagging of sustainability information is a learning and adaptation process. Undertakings that are required to publish a sustainability report for the first time should not be obliged to apply all tagging rules in their first reporting year. Instead, such undertakings should only be required to tag some of their information in their first reporting years. Such an approach has already proved successful in the previous application of the ESEF Regulation.

In response to the new regulations on electronic sustainability reporting, the ASCG has published a briefing paper as an overview and established a working group in cooperation with XBRL Germany. With the establishment of this working group, XBRL Germany and the ASCG are combining their expertise in the area of XBRL standards and sustainability reporting. The aim of the working group is to monitor and assess initiatives for electronic sustainability reporting, in particular current legislative and standardisation projects.