On 5 July 2024, the European Securities and Markets Authority (ESMA) issued a Final Report on Guidelines on Enforcement of Sustainability Information (GLESI). It has also issued a Public Statement on the first application of the European Sustainability Reporting Standards (ESRS).

GLESI

The Corporate Sustainability Reporting Directive (CSRD) expands the scope of undertakings who must report sustainability information and requires the European Commission to adopt mandatory ESRS as delegated acts. To promote convergent supervision of sustainability reporting by issuers subject to the Transparency Directive, the CSRD mandates ESMA to issue guidelines on the supervision of sustainability reporting by Member State competent authorities.

In the Final Report ESMA summarises the feedback received to its earlier consultation on the GLESI and explains how this feedback has been considered when developing the final version. The final version of the GLESI is also located in Annex VI to the Final Report.

The GLESI apply to all Member State competent authorities undertaking supervision under Article 24(4) of the Transparency Directive of sustainability information prepared by issuers listed on an EU regulated market in accordance with Articles 19a, 29a and 29d of the Accounting Directive along with the ESRS and Article 8 of the Taxonomy Regulation along with the related Disclosures Delegated Act (Commission Delegated Regulation 2021/2178 of 6 July 2021).

The GLESI comprise of 22 guidelines grouped into six main areas:

  • Basic concepts.
  • Enforcers’ internal organisation.
  • Selection.
  • Examination.
  • Enforcement actions.
  • European coordination.

Member State competent authorities must make every effort to comply with the GLESI and shall notify ESMA whether they: (i) comply, (ii) do not comply, but intend to comply, or (iii) do not comply and do not intend to comply with the guidelines and the reasons for the non-compliance. ESMA will publish on a regular basis on its website a list of the Member State competent authorities with the indication of their compliance status vis-à-vis the GLESI.

The GLESI will now be translated in the official EU languages and published on ESMA’s website. The publication of the translations in all official languages of the EU will trigger a two-month period during which Member State competent authorities must notify ESMA whether they comply or intend to comply with the guidelines.

Public Statement

The ESMA has also issued a Public Statement on the first application of the ESRS. The Public Statement targets large, listed issuers and does not address reporting requirements pursuant to Article 8 of the Taxonomy Regulation.

The ESMA calls on members of the administrative, management and supervisory bodies of issuers, as well as on those providing assurance on sustainability statements, to ensure that the aspects highlighted in the Public Statement are carefully considered when complying with the new reporting requirements.

In particular, ESMA underlines, the responsibility of the administrative, management and supervisory bodies of issuers, as well as the importance of the oversight role of the audit committee and other relevant committees, to: (i) ensure the overall internal consistency of the sustainability statement and its consistency with the other parts of the annual financial report; (ii) implement and supervise internal controls; and ultimately (iii) contribute to a high-quality sustainability statement.