In view of the uncertainty caused by the simultaneous occurrence of the first ESRS application, an uneven transposition of the CSRD and the Omnibus proposals, the European Securities and Markets Authority (ESMA) issued a public statement on June 20 labelled “Navigating change together: ESRS supervision in the Omnibus environment”.
The statement confirms ESMA’s and national competent authorities’ (NCAs) commitment to promoting transparent sustainability reporting, including to mitigate greenwashing risk.
ESMA’s Guidelines for Enforcement of Sustainability Information (GLESI)
ESMA’s Guidelines for Enforcement of Sustainability Information (GLESI), applicable since January 2025, provide a common principles-based framework to conduct supervision of sustainability reporting in accordance with the CSRD and the ESRS.
GLESI will help enforcers discover potential infringements in the sustainability information, for example possible greenwashing issues.
ESMA acknowledges that the first years of ESRS application will imply a learning curve for all parties, necessitating an adjustment period to reach a common understanding of the new requirements.
Application of the GLESI during this phase will need to be proportionate and realistic, with an emphasis on support, dialogue, improvements, and, where necessary, enforcement actions.
It is important to apply the GLESI from the first year in which enforcers will examine sustainability statements drawn up under the ESRS to ensure a convergent enforcement approach from year 1.
The CSRD aims to make the status of sustainability information comparable to that of financial information. Practical experience with enforcing the ESRS will allow enforcers to refine their processes and resources.
Enforcers should react in a consistent manner if infringements of the sustainability information framework are detected.
It is generally expected that the sustainability statements of issuers selected through risk-based selection have a higher likelihood of containing infringements.
A risk-based selection should therefore be used for at least 50% of the issuers whose sustainability information enforcers examine.
Approaches to enforcing sustainability information
Enforcers should identify the most effective way to enforce sustainability information.
They can use four different approaches when they examine sustainability information, differing on two parameters:
- whether the enforcer communicates with the issuer during the examination (interactive vs. desktop examination) and
- whether the enforcer bases its examination on the entirety or a subset of the sustainability information (unlimited vs. focused examination).
The use of interactive unlimited examinations should be used for at least 33% of the examinations, or cover at least 10% of the total amount of issuers for this type of examination.
As infringements could, by definition, have an impact on the decisions made on the basis of sustainability information, it is important that the corrected information is published, unless impracticable, on a timely basis.
Whenever an infringement is detected, the enforcer should take at least one of the following actions:
- require a reissuance of the sustainability statement,
- require a corrective note, or
- require a correction in the future sustainability statement with restatement of comparatives, where relevant.
Where an immaterial departure from the sustainability information framework is left intentionally uncorrected to achieve a particular presentation of the issuer, the enforcer should take appropriate action as if it was material.
Enforcers should report periodically on their enforcement activities at national level and provide ESMA with the necessary information for the reporting and coordination of the enforcement activities carried out at European level.
Eight Member States have currently not transposed the CSRD into national legislation: Austria, Cyprus, Germany, Luxembourg, Malta, Netherlands, Portugal, Spain.
For these Member States, national competent authorities’ (NCAs) approach to supervision of sustainability reporting will be to continue delivering on their supervisory mandate in accordance with current national law.
While these NCAs cannot formally declare compliance with the GLESI, they will apply comparable procedures in line with ESMA’s guidance on sustainability information.
The European Sustainability Reporting Working Group (SRWG)
In order to achieve a high level of harmonisation in enforcement, enforcers should discuss and share experience on the application and enforcement of the sustainability information framework during meetings of the Sustainability Reporting Working Group (SRWG).
The purpose of having such discussions in the SRWG is to enable European coordination of national enforcement activities and for this reason, all enforcers should send representatives to this group.
Download the full statement here: https://www.esma.europa.eu/sites/default/files/2025-06/ESMA32-992851010-2254_Statement_on_the_ESRS_supervision_in_the_Omnibus_environment.pdf
ESMA’s Guidelines for Enforcement of Sustainability Information (GLESI), applicable since January 2025 can be downloaded here: https://www.esma.europa.eu/sites/default/files/2023-12/ESMA32-992851010-1016_Consultation_Paper_on_Guidelines_on_Enforcement_of_Sustainability_Information.pdf
You are welcome to contact us if you are interested in streamlining your ESG strategy, governance and reporting processes and achieve full compliance with the ESRS: www.cleeritesg.com
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