The European Sustainable Investment Forum (EUROSIF), the European Fund and Asset Management Association (EFAMA) and Principles for Responsible Investment (PRI) have released a joint statement, calling on EU policymakers to ensure there is a “credible and proportionate voluntary sustainability reporting standard” for companies with over 250 employees that are not subject to the CSRD under the revised scope.
“For companies that will be left out of the CSRD scope, the recently endorsed VSME standard is unlikely to fill the resulting data gap, as it was never designed for this purpose,” the statement reads. “While appropriate for very small businesses, it does not capture the sustainability profile of larger companies, as it lacks the granularity, consistency, and reliability that investors and other sustainability information users need for financing purposes.”
“We believe it is timely and critical to develop a fit-for-purpose voluntary standard for small and mid-caps that is compatible with the CSRD framework,” it continues.
EUROSIF, EFAMA and PRI recommend that the EU establish a voluntary standard for small and mid-cap companies based on a subset of datapoints in the revised ESRS. They also recommend that the standard should maintain a mandatory “but proportionate” materiality assessment for preparers.
