21 October 2022

EFRAG board discusses usefulness of voluntary staff ethnicity disclosure

EFRAG's Sustainability Reporting Board debated whether there would be any added value in including a voluntary datapoint on the ethnic diversity of a company's workforce in in ESRS S1 Own Workforce.

The inclusion of this voluntary data point was proposed by members of the Sustainability Reporting Technical Expert Group (SR TEG) and presented to the board by Sigurt Vitols, acting vice-chair of the SR TEG, yesterday (20 October).

The SR TEG also proposed the addition of mandatory datapoints on the percentage and number of women in top management positions, the distribution of own employees by age group and the percentage and number of persons with disabilities in the workforce.

For the ethnic diversity datapoint, companies would have to conduct voluntary surveys to collect the necessary data in order not to infringe privacy laws in some European countries that prohibit the formal collection of this data.

Simon Braaksma, SRB member for the Netherlands, said he had concerns on the proposed changes arguing that using voluntary surveys would overburden companies and not produce representative data.

He also questioned the "added value" of the datapoint if it was voluntary. Begoña Giner, SRB member for civil society, also said she didn't understand the inclusion of a voluntary datapoint.

Vitols accepted these concerns but stressed the importance of including a datapoint on ethnicity as it is "one of the fundamental dimensions of diversity" in the CSRD and added that it would only be possible to include this datapoint on a voluntary basis due to the constraints of data protection acts.

The TEG will meet later today (21 October) to discuss the feedback received from the SRB on the proposals before finalising their proposed changes to the social standards.