• The Transparency, Good Governance and Integrity Cluster -led by Forética and composed of more than 60 large companies-, addresses the implications of the upcoming Sustainability Reporting Directive, which will affect more than 50,000 European companies.
• In view of the strong global regulatory dispersion in sustainability reporting, the Cluster analyzes the creation of a global reporting standard, with some discrepancies in basic concepts such as the definition of materiality.
• The focus of the Cluster's work is to promote a sustainable corporate governance model and to transfer the most cutting-edge trends in reporting to continue promoting responsible leadership from Governance with a capital G.

The Transparency, Good Governance and Integrity Cluster, led by Forética and made up of more than 60 large Spanish companies - headed by CaixaBank, Cuatrecasas, Grupo Cooperativo Cajamar and Leroy Merlin - addresses the main developments in sustainability and transparency reporting, as well as the impact that new regulations and standards will have on companies and on the ESG (environmental, social and governance) reporting process. Given the strong regulatory dispersion, the Cluster analyzes the creation of a global reporting standard, with some discrepancies in basic concepts such as the definition of materiality.

From the European perspective, the new Sustainability Reporting Directive (CSRD), which will replace the Non-Financial Reporting Directive, aims to homogenize and standardize the sustainability reporting of organizations, with the objective of making this information useful for both investors and other stakeholders.

With the approval of the new Directive, the scope of application of the current Directive (which affects approximately 11,700 companies) has been extended to include all large companies and listed companies, totaling approximately 50,000 companies in Europe. It also requires auditing of the information reported and asks member states to create a penalty system for non-compliance, with the aim of improving the reliability and accuracy of sustainability information. At the same time, a European taxonomy of sustainable finance is being developed.

Focusing on the international panorama, as Jaime Silos, Director of Corporate Development at Forética, points out: "The recent creation of the International Sustainability Standards Board (ISSB) by the International Financial Reporting Standards Foundation is a major step forward that puts the focus on the financial markets in the ESG field, and in turn has an impact on those companies in the European Union whose activity goes beyond European borders. In this context, companies are faced with an increased concurrence of standards and initiatives at national and international level. Now more than ever, proactive and anticipatory business action is key, and the effectiveness of the various reporting alternatives must be strategically reviewed to ensure the greatest impact".

The most innovative trends in sustainable reporting

The publication last April of the draft European Sustainability Reporting Standards (ESRS) by the European Financial Reporting Advisory Group (EFRAG), followed by the provisional political agreement between the Council and the European Parliament on June 21, represents a major step forward in line with the European objective of remedying the shortcomings of existing standards on non-financial disclosure and puts Europe at the forefront of the regulatory race. The draft isopen for public consultationuntil August 8.

María Ordovás, Manager of the Transparency, Good Governance and Integrity Cluster, says: "In the current context of growing demand for ESG aspects and increased regulatory pressure, we at Forética continue to work with the aim of promoting sustainability by promoting transparency in the activity of companies. Thus, the focus of the Cluster's work is to promote a sustainable corporate governance model and to transfer the most cutting-edge and innovative trends in reporting in order to continue promoting responsible leadership from Governance with a capital G".

The second annual meeting of the Transparency, Good Governance and Integrity Cluster was attended by Roberto Fernández, ESG Director at Iberdrola; Ramón Pueyo, Partner in charge of Sustainability and Good Governance at KPMG; Daniel Segarra, Senior Director of Investor Relations and Sustainability at Grifols; and Consuelo Madrid, Head of Corporate Governance and Strategic Management Support at Agbar, who analyzed, based on their experience and activity, the challenges and opportunities brought about by the new reporting frameworks.

The Transparency, Good Governance and Integrity Cluster, led by Forética, aims to address different topics related to the management of ESG aspects, transferring the main trends in this area and serving as a meeting point where companies can discuss and exchange knowledge.

The Transparency, Good Governance and Integrity Cluster 2022 is led by CaixaBank, Cuatrecasas, Grupo Cooperativo Cajamar and Leroy Merlin. The cluster is also made up of the following companies: Accenture, Adif, Agbar, Airbus, Alsea, AstraZeneca, Atresmedia, Capital Energy, Cecabank, Cellnex, Cerealto Siro, CIE Automotive, Damm, Ecoembes, EDP, El Corte Inglés, Enagás, ENAIRE, Endesa, Engie, Enresa, Ferrovial, Gestamp, Grifols, Grupo Antolín, Grupo ASISA, GSK, HEINEKEN, Ibercaja, Iberdrola, ILUNION, ICO, ISS, KPMG, Kyndryl, LafargeHolcim, Lilly, L'Oréal, Mahou San Miguel, Mapfre, Mazars, Mediaset España, Mercadona, MSD, Mutua Madrileña, Mutualidad de la Abogacía, Naturgy, Navantia, OHLA, P&G, Prisa, Reale Seguros, Redeia, Sacyr, Sanitas, SAP, Solarpack, TÜV Rheinland and Vodafone.

Since its launch in 2016, the Transparency, Good Governance and Integrity Cluster has focused on analyzing issues such as ESG stewardship, sustainability competencies in Boards of Directors, ESG shareholder activism, value creation through governance and extra-financial management.