News 31/10/24

Key focus areas for 2024 reporting

The Dutch Authority for the Financial Markets (AFM) asks listed companies to pay extra attention to ESMA's recent enforcement priorities and sustainability when preparing their 2024 reporting. These focus areas are also relevant for audit committees that oversee the reporting process and audit firms that audit the reporting.

In short

Address ESMA’s enforcement priorities in 2024 reporting
New sustainability reporting requirements for large listed companies apply from 2024
Communicate transparent on dual materiality and climate targets
Also pay attention to financial topics, such as IFRS 17

Address ESMA’s enforcement priorities in 2024 reporting

On 24 October, ESMA published the enforcement priorities for the 2024 reporting. The AFM will pay extra attention to these priorities next year. In summary, it involves:
1. Sustainability: materiality considerations, scope & structure and Article 8 Taxonomy disclosures.
2. Financial statements: liquidity considerations (including new regulations on supplier finance arrangements and covenants) and accounting policies, judgements & significant estimates.
3. The correct application of the European Single Electronic Format.
In addition, connectivity between information between information in various parts of the report is crucial.

New sustainability reporting requirements for large listed companies apply from 2024

The implementation of the Corporate Sustainability Reporting Directive (CSRD) and the European Sustainability Reporting Standards (ESRS) marks a new phase in sustainability reporting. To support its implementation, ESMA discusses areas of attention and discusses elements of guidance by the European Commission and EFRAG in Off to a good start.

Communicate transparent on dual materiality and climate targets

Double-materiality analysis is the cornerstone for proper sustainability reporting. Companies are also currently vague about how they will achieve net-zero in 2050. The AFM expects understandable, transparent communication on these topics. Name the uncertainties and challenges identified. Ten waypoints for CSRD – Double Materiality and Transparant net-zero targets require courage show that it can be done!

Also pay attention to financial topics, such as IFRS 17

In Market Watch 11, the AFM urges compliance with ESMA Guidelines on APMs in publications, including the management report. Insurance companies will find practical examples and recommendations on how to apply IFRS 17 in a recent ESMA report ‘From black box to open book’. ESMA’s public statement Clearing the smog, calls for more transparency on the accounting for carbon allowances.