The Swiss Finance Council (SFC) supports and advocates for a strong and ambitious response to climate change, as demonstrated by our members' commitment to transparency through the alignment of their climate disclosures with the Task Force on Climate-Related Financial Disclosures (TCFD) 's recommendations and embedding sustainability into their business strategy and practice. SFC's members have committed to achieving net zero emissions across their operations, supply chain, and financing activities.
We strongly support international efforts to improve the availability, reliability, comparability, and interoperability of sustainability data. As recognised by the G20 and G7, it is essential to have an effective framework for sustainability reporting to maximise the interoperability of jurisdictional reporting standards, minimising fragmentation and overlap of requirements for internationally active companies. In this context, the international standards developed by the International Sustainability Standards Board (ISSB) have the potential to become the global baseline of sustainability reporting, allowing jurisdictions to build on this foundation while facilitating interoperability of local initiatives and increasing the comparability of sustainability reporting.
While we commend the European Commission and EFRAG for the impressive work done on the Corporate Sustainability Reporting Directive (CSRD) and the draft European Sustainability Reporting Standard (ESRS), we would like to stress once again that the extraterritorial scope of application of the CSRD will impact a large number of international non-EU companies which will be required to report according to the ESRS in addition to their jurisdictional reporting frameworks. These companies will need to navigate multiple standards with potentially substantial differences, such as the scope of the assurance requirements, the disclosure location, and materiality-related definitions, that may be difficult to reconcile and will result in burdensome compliance complexity and costs. Similarly, internationally active EU companies will likely be required to report according to foreign sustainability disclosure regimes on top of their EU requirements. The interoperability and comparability of the ESRS with the ISSB global baseline of sustainability disclosures are thus crucial to avoid a double reporting burden for reporting companies and confusing disclosures for investors.
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