13 July 2022

Dawn Slevin speech to the European Parliament

Introductory remarks delivered by Dawn Slevin, managing director at ELS Europe and a member of EU sustainable finance TEG and EFRAG's task force on reporting non-financial risk & opportunities, during the European Parliament audition of candidates for the position of chair of EFRAG's Sustainability Reporting Board.

Dawn SlevinSince I grew up on a farm in rural Ireland and over the course of my young life, my observations and love of the environment led me to complete my science and engineering degree in Trinity College Dublin and Queen's University Belfast, and to go on to work with numerous multinational companies across many economic sectors, both large companies and SMEs, and to start my own business, ELS Europe, with staff and offices based in Ireland.

As I see it, sustainability rules and financial rules, together form a lattice structure, a meeting of the vertical and horizontal which creates a tension and, through this tension, creates strength, durability and formability. Lattice structures occur naturally in metals and are responsible for their deep forming and forging characteristics. In the same manner, the combined forces of financial rules and sustainability-related rules are going to form and provide the properties necessary for us to forge a new, sustainable and prosperous future for our economy and people.

The European sustainability reporting standards represent that part of a rules-based system that vigilantly protects environmental, social and economic fairness and prosperity. And will allow stakeholders to find solutions to questions such as: How do we ensure access to clean water, clean soil and clean air for our people and our businesses? How do we safeguard and future proof our homes, our communities and businesses from the hazards of a changing climate? And what are the best ways to balance the needs of humans with that of our natural life; our plants and animal life? How can we best support and allocate capital to companies who provide genuine products and services necessary to solve these, and many more issues?

In essence, the standards will allow stakeholders to fully assess the risks, opportunities and impacts of enterprises across the lifecycle of products and services. They will provide certainty and technically sound information, for which European businesses can press forward as global leaders in a rapid transition to a safer, secure and prosperous future. The values and principles that codify the EU's rules-based system include the principle of subsidiarity, of proportionality, the polluter pays principle and the EU Charter of Fundamental Rights. And these language principles of transparency are embedded in the CSRD and its standards. But principles must be implemented. The European economic model, and indeed the global economic model, continue to use resources and quantities and rates beyond their planetary limits.

Continue to emit excessive greenhouse gases. To destroy natural habitats and species they support. To pollute our air, water and soil with organic and inorganic contaminants. And continue to overlook that in many parts of the world, the lifecycle of products and services, traded by the EU, are derived in part or in full, from regions where the fundamental universal rights and environmental protections, that we live and work by, are seriously eroded or entirely absent.

It is almost inconceivable yet true that, up to the 2018 Sustainable Finance Action Plan and prior to the development of the new transparency laws, financial market stakeholders did not have access to reliable, consistent and comparable information on sustainability-related impacts arising from critical economic activities such as agriculture, construction, energy, manufacturing, finance, and more. Stakeholders were deprived of key information that would open the doors to the manifest opportunities that an environmentally and socially sustainable model brings, and why is this?

It's approximately two centuries since financial reporting for companies, as we know it today, began to evolve. It's five decades since the club of Rome's 'Limits to Growth on the Future Predicament of Man' and four decades since the World Commission on Environment and Development published 'Our Common Future'. Yet only now are we developing comprehensive sustainability reporting standards which will be applied by law.

A lot of ground needs to be covered in a short space of time if we are to meet our 2030 and 2050 goals. It is of immense importance that all of our leading players and stakeholders, our EU institutions, our member state governments, our financial market participants across insurance, asset management, and banking, our businesses; large, listed, unlisted, our SMEs and their trade bodies, NGOs, consumer organizations, academics and our citizens are now working together to change the status quo away from current 'business as usual', to a new transformative 'business as usual' model.

Collectively, we are co-developing the European sustainability reporting standards. Acting as a well-functioning, democratic society to put into practice our values and principles whilst maintaining our prosperity. More than anything, we are building renewed hope for our young and our future generations, not only in Europe but across the world, that we can, and will, change our current trajectory for the common good.

Underlying this co-development and fueling my personal motivation and leadership is a sense of fairness that I, should I be appointed to the position of chair of the EFRAG's Sustainability Reporting Board (SRB), will bring alongside my three decades of work experience as an environmental science and engineering practitioner, including my deep technical and commercial skills and regulatory knowledge necessary to work with financial and non-financial entities to assess and manage sustainability related risks and opportunities. My experience developing environmental strategies and methodologies for risk assessment, management and remedial actions, whilst respecting stakeholder interests. The capacity building and knowledge exchange expertise I bring across a range of sectors and topics, including on sustainability related disclosures, and the cross sectoral scientific, regulatory and financial knowledge, that are used for the development of the technical screening criteria as a member of the EU taxonomy Technical Expert Group, now published in the Taxonomy's climate delegated acts, and of course, the EFRAG insights on sustainability related risks and opportunities and linkage to the business model to my co-chair position of EFRAG Project Task Force and reports and annexes our group produced and more that I will be happy to expand upon.

Were you select me for the position of chair of the SRB, I will work with the members ensuring that the CSRD standards are firstly fully consistent with the legal framework of the CSRD and are therefore implementable by preparers and achieves the information needs of users. Secondly, that they will interconnect deeply with the financial reporting board and the financial rules. Thirdly, that they will take account of the Sustainable Finance Disclosure Regulation, the associated technical regulatory standards, the taxonomy regulation and its annexes, and all of the other financial reporting rules that are being evolved at the moment. And finally, they will take account of global standards and frameworks, such as those of the IFRS the IASB and explain how they are different and why. In doing so, I will ensure that the viewpoints of all the skilled professionals from the SRB member organizations, the General Assembly, the Administrative Board, from the European public institutions and, critically, from the respondents to the consultations and participants at hearings, who don't have a formal role to play, are taken into consideration in order that the decisions made on behalf of the SRB are well informed and rational. Under my chairmanship the SRB will reflect upon, examine and support the best possible outcomes for businesses, public good and future generations to come.

The SRB, through the chairmanship of Jean-Paul Gauzès, the technical expert group and it's working groups, through the chairmanship of Patrick de Cambourg, have demonstrated immense knowledge and capabilities across numerous ESG topics in the draft standards prepared to date. As chair of the SRB, I will work with colleagues to ensure that a clear work plan for ongoing standard setting is agreed upon and the SRB experts will continue to provide clear guidance and feedback on ongoing technical work.

Having previously worked closely with EFRAG's secretaries, I eagerly anticipate the opportunity to continue our work together. And my work with the European Commission has provided me with the knowledge of the many facets of the EU's Green Deal, the taxonomy and the skilled personnel who have set thorough, realistic and ambitious goals and I would bring to the position of chair my in-person experience of the Commission's people, units and operations.

My life's work has been firmly embedded in the enterprising dynamic and innovative facets of business. The aim is to help unlock the sustainability potential of European businesses and their global partners, ensuring that sustainability along with financial reporting rules are coherent and implementable. In the end, it is business's valuable contribution to the economic, environmental and social welfare of Europe that is key to forging an enduring, sustainable and prosperous future.

This is an edited transcript by Corporate Disclosures, any inaccuracies or discrepancies vis-à-vis the spoken speech is our responsibility.

ELS Europe
Dawn Slevin