Monthly Archives: July 2025

ESMA addressing misleading sustainability-related claims and greenwashing risks

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On July 1st, ESMA published thematic notes on clear, fair & not misleading sustainability-related claims, addressing greenwashing risks in support of sustainable investments.

This is valuable information for any company writing a sustainability report, whether compliant with ESRS or VSME

In line with the work carried out by ESMA on greenwashing, in which good and bad practices have been observed, the aim is to

  • explain and clarify ESMA’s expectations towards market participants when making sustainability claims,
  • remind market participants about their responsibility to make claims only to the extent that they are clear, fair and not misleading.

Market participants should acquaint themselves with the below four principles for making sustainability claims to ensure that all claims are clear, fair, and not misleading and thereby avoid the risk of greenwashing.

Misleading claims can in particular take the form of cherry-picking, exaggeration, omission, vagueness, inconsistency, lack of meaningful comparisons or thresholds, misleading imagery or sounds, etc.

The 4 principles to follow are, in short:

1) Accurate

Sustainability claims should fairly and accurately represent the entity’s sustainability profile, without exaggeration and avoiding falsehoods.

Claims should be precise and be based on all relevant positive and negative aspects.

Omission and cherry-picking should be avoided.

Claims should steer clear of vagueness and excessive references to irrelevant or non-binding information.

2) Accessible

Sustainability claims should be based on information that is easy to access and easy to browse through by readers and at an appropriate level of detail so they are understandable.

Claims should not be oversimplistic but should be easy to understand.

3) Substantiated

Sustainability claims should be substantiated with clear and credible reasoning, facts and processes.

Substantiation should be based on methodologies (including comparisons, thresholds or underlying assumptions) that are fair, proportionate and meaningful.

Limitations of information, data and metrics used in a claim should be made available.

Comparisons should make clear what is being compared, how the comparison is made and, if possible, compare “like with like”.

4) Up to date

Sustainability claims should be based on information that is up to date with any material change to be disclosed in a timely manner.

The clear indication of the analysis’ date and perimeter could be useful for this purpose.

 

ESG credentials

ESMA also points out that references to ESG credentials are among the most prominently used claims in retail-investor focused communications.

These include references to qualifications, labels, ratings, certificates -and can be misleading in several ways.

For instance, by overstating the significance of having a given label, of receiving an ESG award, of being signatory to a voluntary framework, etc.

Clarify if the labels’ underlying criteria are focused solely on having in place processes, and/ or if they also require delivering on specific positive sustainability outcomes.

Be transparent about the governance around the process of the awarding body, the eligibility criteria, the date of the different versions or updates and clarify if the label/award consists of subcategories.

When using a credential attributed by entities that may also sell paid services, do clarify any potential conflict of interest and payment of fees to the attributing entities (e.g. if your entity was a sponsor of the ESG award).

Mention for which period the ESG award was given and when it was received.

 

Access the full thematic note, with ESMA’s Do’s and Don’ts here:

https://www.esma.europa.eu/sites/default/files/2025-07/ESMA36-429234738_-154_Thematic_notes_on_clear__fair___not_misleading_sustainability-related_claims.pdf

 

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EFRAG 2025 State of Play: insights from 656 ESRS reports issued in 2025

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En svensk översättning följer nedan.

The “EFRAG 2025 State of Play” report released yesterday 23/7, offers valuable key insights from 656 ESRS sustainability statements issued in 2025.

The report aims to inform preparers, regulators, and other stakeholders as Europe transitions to a more transparent and accountable sustainability reporting landscape.

It highlights that while many companies have taken significant steps, consistent and comparable reporting is still evolving.

In other words, we are still learning and improving.

Here are some of the key insights, in short:

The average length of sustainability statements is 115 pages, the median is 100, the longest statement has ~440 pages and the shortest ~25 pages. Only ~25% of preparers’ statements have fewer than 70 pages.

Southern EU countries (e.g., Spain and Italy) have longer statements, while Nordics (e.g., Sweden, Norway and Denmark) have shorter statements on average.

When engaging with preparers, the EFRAG Secretariat noted two factors that could potentially drive this trend:

  1. Cultural habits: preparers tend to align with average length of their financial statements; and
  2. Peer comparisons: northern EU preparers align with peers’ writing styles.

Data point-level disclosures vary extensively, e.g., content and use of tables and clear labelling of datapoints.

Clear and structured descriptions provided for each IRO facilitates understanding of their relevance and implications.

Nearly all preparers (97%) engage internal stakeholders (mainly employees) as part of their DMA, confirming the reliance of internal input, followed by other primarily business-related stakeholders such as Clients (~70%); Suppliers (~65%) and Investors (~60%). Engagement with broader societal stakeholders is less common.

Three topical standards are material for nearly all preparers: E1 (98%), S1 (99%) and G1 (93%).

Other frequently reported topical standards include: E5 (65%), S2 (63%) and S4 (68%).

Some are less frequently cited as material, such as E3 (33%) and S3 (30%).

Once again, the regional patterns continue, with Southern EU countries reporting more material topical standards than Nordic peers (e.g., Spain: 7, France: 7, Italy: 7 vs. Norway: 6, Finland: 6, Denmark: 6).

55% of preparers claim to have a Transition plan for climate change mitigation (CTP), but clear disclosure of all the CTP elements (as per draft IG4) is not yet highly detailed and standardized across preparers, hindering comparability. Only a few preparers fully explain the CTP components outlined in draft IG4, indicating a gap between formal declaration and meaningful disclosure.

Adoption of Transition plan for climate change mitigations is higher in Northern and Western Europe (e.g., Netherlands: 73%, Sweden: 69%, Denmark: 69%).

While ~70% of preparers commit to limiting warming to below 1.5°C for their Scope 1 & 2 emissions, only ~40% of these extend this target to include Scope 3 emissions.

60% of preparers reported that their climate targets have been validated by SBTi (Science-Based Targets Initiative)

Only ~30% of preparers across all sectors report biodiversity metrics, among those, the amount of metrics disclosed on average is low (~4 metrics each).

Disclosure is higher in France (49%), Sweden (44%), Austria (44%), and the Netherlands (39%) and lower uptake observed in Italy (18%) and Germany (23%).

S1: Most preparers declare providing adequate wages, but with limited contextual information provided. While most preparers still present Health & Safety policies separately from their actions and performance data, some preparers have started to link policies with actions and metrics and outcomes clearly.

S2: While many preparers still report human rights policies regarding their Value Chain at a high level, some are starting to operationalise them through supplier actions, ESG onboarding, and grievance mechanisms to enable consistent oversight

S3: The affected communities disclosures demonstrate a growing effort to track and communicate social value creation, particularly through impact-focused initiatives linked to partnerships, or core business.

S4: Consumer impact disclosures often reflect reputational priorities, emphasising purpose-led branding, consumer trust, or themes related to well-being.

You can download the full report and access EFRAG’s portal here:

https://www.efrag.org/en/news-and-calendar/news/efrag-launches-esrs-statistics-and-report-portal-on-the-2025issued-esrs-sustainability-statements?ct=AAAAAhQFEQFzFAIGABEFZW1haWwGAQgI9BEBZQgI9BECc3QRFjY4ODBlMjdiNzVhNGI3NDE1Nzk5MTARAWwRBTU2OTY1EQFjFAEOAggI9A%253D%253D

Stay tuned for more CSRD, ESRS and VSME insights on our LinkedIn page >>

—SVENSK ÖVERSÄTTNING—

Rapporten “EFRAG 2025 State of Play” som släpptes igår, 23/7, erbjuder värdefulla insikter från 656 ESRS-hållbarhetsrapporter som utfärdades under 2025.

Rapporten syftar till att informera företag, tillsynsmyndigheter och andra intressenter i takt med att Europa övergår till ett mer transparent och ansvarsfullt hållbarhetsrapporteringslandskap.

Den belyser att även om många företag har tagit betydande steg, så utvecklas konsekvent och jämförbar rapportering fortfarande.

Med andra ord, vi lär oss fortfarande och förbättrar.

Här är några av de viktigaste insikterna, i korthet, översatta till svenska av Cleerit (inofficiell översättning):

Den genomsnittliga längden på hållbarhetsrapporter är 115 sidor, medianen är 100, den längsta rapporten har ~440 sidor och den kortaste ~25 sidor. Endast ~25 % av rapporterna har färre än 70 sidor.

Länder i södra EU (t.ex. Spanien och Italien) har längre rapporter, medan de nordiska länderna (t.ex. Sverige, Norge och Danmark) har kortare rapporter i genomsnitt.

Vid utbyte av information med de som förberett rapporterna noterade EFRAG-sekretariatet två faktorer som potentiellt skulle kunna driva denna trend:

  1. Kulturella vanor: företag tenderar att anpassa sig till den genomsnittliga längden på sina finansiella rapporter; och
  2. Jämförelser med liknande bolag: företag i norra EU anpassar sig till liknande bolags sätt att skriva.

Upplysningar på datapunktsnivå varierar kraftigt, t.ex. innehåll och användning av tabeller och tydlig märkning av datapunkter.

Tydliga och strukturerade beskrivningar för varje IRO underlättar förståelsen av deras relevans och konsekvenser.

Nästan alla företag (97 %) engagerar interna intressenter (främst anställda) som en del av sin väsentlighetsanalys, vilket bekräftar att man förlitar sig på intern input.

Därefter följer andra främst affärsrelaterade intressenter, såsom kunder (~70 %); leverantörer (~65 %) och investerare (~60 %).

Dialoger med bredare samhällsintressenter är mindre vanligt.

Tre ämnesstandarder är väsentliga för nästan alla företag: E1 (98 %), S1 (99 %) och G1 (93 %).

Andra ofta rapporterade standarder inkluderar: E5 (65 %), S2 (63 %) och S4 (68 %).

Vissa citeras mindre ofta som väsentliga, såsom E3 (33 %) och S3 (30 %).

Återigen ser man ett regionalt mönster, där länder i södra EU rapporterar mer väsentliga ämnesstandarder än nordiska konkurrenter (t.ex. Spanien: 7, Frankrike: 7, Italien: 7 jämfört med Norge: 6, Finland: 6, Danmark: 6).

55 % av företagen uppger att de har en övergångsplan för klimatförändringsbegränsning (CTP), men tydlig redovisning av alla CTP-element (enligt utkastet till IG4) är ännu inte särskilt detaljerad och standardiserad mellan företagen, vilket hindrar jämförbarheten.

Endast ett fåtal företag ger upplysningar om de CTP-element som beskrivs i utkastet till IG4 fullt ut, vilket indikerar ett avstånd mellan formell och meningsfull rapportering.

Antagandet av övergångsplaner för klimatförändringsbegränsningar är högre i Nord- och Västeuropa (t.ex. Nederländerna: 73 %, Sverige: 69 %, Danmark: 69 %).

Medan ~70 % av företagen åtar sig att begränsa uppvärmningen till under 1,5 °C för sina Scope 1- och 2-utsläpp, utökar endast ~40 % av dessa detta mål till att omfatta Scope 3-utsläpp.

60 % av företagen rapporterade att deras klimatmål har validerats av SBTi (Science-Based Targets Initiative).

Endast ~30 % av företagen inom alla sektorer rapporterar mätvärden för biologisk mångfald, bland dessa är mängden mätvärden som redovisas i genomsnitt låg (~4 mätvärden vardera). Rapporteringen är högre i Frankrike (49 %), Sverige (44 %), Österrike (44 %) och Nederländerna (39 %) och lägre upptag observerats i Italien (18 %) och Tyskland (23 %).

S1: De flesta företag uppger att de tillhandahåller tillräckliga löner, men med begränsad kontextuell information. Medan de flesta företag fortfarande presenterar hälso- och säkerhetspolicyer separat från sina åtgärder och resultatdata, har vissa företag tydligt börjat koppla policyer till åtgärder, mätvärden och resultat.

S2: Medan många företag fortfarande rapporterar policyer för mänskliga rättigheter gällande sin värdekedja på hög nivå, börjar vissa omsätta dem i praktiken genom leverantörsåtgärder, ESG-onboarding och klagomålsmekanismer för att möjliggöra konsekvent tillsyn.

S3: Upplysningarna gällande berörda samhällen visar en växande ansträngning för att följa upp och kommunicera skapande av socialt värde, särskilt genom effektfokuserade initiativ kopplade till partnerskap eller kärnverksamhet.

S4: Upplysningar om konsumentpåverkan återspeglar ofta prioriteringar gällande anseende och betonar syftesdrivet varumärke, konsumentförtroende eller teman relaterade till välbefinnande.

Du kan ladda ner hela rapporten och få tillgång till EFRAGs portal här:

https://www.efrag.org/en/news-and-calendar/news/efrag-launches-esrs-statistics-and-report-portal-on-the-2025issued-esrs-sustainability-statements?ct=AAAAAhQFEQFzFAIGABEFZW1haWwGAQgI9BEBZQgI9BECc3QRFjY4ODBlMjdiNzVhNGI3NDE1Nzk5MTARAWwRBTU2OTY1EQFjFAEOAggI9A%253D%253D

Välkommen att följa oss på LinkedIn >> för mer information om CSRD, ESRS och VSME.

ESRS Quick-Fix amendments on phase-in disclosure requirements for Wave 1 companies

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On July 11, the European Commission adopted “quick fix” amendments for phase-in disclosure requirements in ESRS Set 1 for Wave 1 companies that started ESRS reporting for financial year 2024, and were not covered by the “Stop-the-clock” Directive.

This amendment ensures these companies won’t need to report additional information for financial years 2025 and 2026 compared to 2024, while awaiting the adoption of ESRS simplifications and Omnibus proposals.

All Wave 1 companies are now allowed to omit the following requirements for FY 2025 and 2026:

Phase-in topical standards

    • E4: Biodiversity and ecosystems
    • S2: Value Chain Workers
    • S3: Affected Communities
    • S4: Consumers and End-Users

Phase-in datapoints

    • Anticipated financial effects from risks and opportunities → SBM-3/ E1-9/ E2-6/ E3-5/ E4-6/ E5-6
      • Except for the information prescribed by paragraph 40 (b) (E2-6) on the operating and capital expenditures occurred in the reporting period in conjunction with major incidents and deposits
    • E1-6: Data points on Gross Scopes 3 and Total GHG emissions
    • S1-7: Characteristics of non-employee workers in the undertaking’s own workforce
    • S1-14: Data points on health and safety for non-employees
    • S1-8: Collective bargaining coverage and social dialogue with regard to its own employees in non-EEA countries
    • S1-11 to 13: Social Protection, Percentage of employees with disabilities, Training and Skills Development
    • S1-14 : Data points on cases of work-related ill-health and on number of days lost to injuries, accidents, fatalities and work-related ill health
    • S1-15 : Work-life balance

However, wave 1 companies that use the temporary exemptions for a complete topical standard must nevertheless report certain summarised information on the topic concerned if they conclude that the topic in question is material, as required by ESRS 2 paragraph 17:

If an undertaking or group … decides to omit the information required by E4, S1, S2, S3 or S4…, it shall nevertheless disclose whether the sustainability topics covered respectively by E4, S1, S2, S3 and S4 have been assessed to be material as a result of the undertaking’s materiality assessment.

In addition, if one or more of these topics has been assessed to be material, the undertaking shall, for each material topic:

  1. disclose the list of matters (i.e. topic, sub-topic or sub-sub-topic) in AR 16 ESRS 1 Appendix A that are assessed to be material and briefly describe how the undertaking’s business model and strategy take account of the impacts of the undertaking related to those matters. The undertaking may identify the matter at the level of topic, sub-topic or sub-sub-topic
  2. briefly describe any time-bound targets it has set related to the matters in question, the progress it has made towards achieving those targets, and whether its targets related to biodiversity and ecosystems are based on conclusive scientific evidence
  3. briefly describe its policies in relation to the matters in question
  4. briefly describe actions it has taken to identify, monitor, prevent, mitigate, remediate or bring an end to actual or potential adverse impacts related to the matters in question, and the result of such actions
  5. disclose metrics relevant to the matters in question.

Therefore, in practice, this means that if your company has already disclosed on the topical standards E4 and S2-S4, you may as well continue to disclose in the same format, instead of moving the information to ESRS 2 paragraph 17.

Meanwhile, the Commission (together with EFRAG) is working on a broader revision of the ESRS that is expected to be completed by financial year 2027.

(A word of caution, there are small errors in the Commission’s summary of modifications table: for E4, S2, S3 and S4, it should read FYs 2025 and 2026 and not FYs 2025 and 2025.)

—

This Regulation shall enter into force on the third day following that of its publication in the Official Journal of the EU and shall apply with respect to financial years beginning on or after 1 January 2025. This Regulation shall be binding in its entirety and directly applicable in all Member States.

Source:

https://finance.ec.europa.eu/publications/commission-adopts-quick-fix-companies-already-conducting-corporate-sustainability-reporting_en

Simplification of EU (Green) Taxonomy

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On July 4, the European Commission adopted a set of measures to simplify the application of EU (Green) Taxonomy.

The changes include simplified reporting templates for non-financial undertakings that will result in a reduction of reported data points (in the case of one Taxonomy-aligned activity) from 78 to 28, which is a 64% reduction.

The simplification measures include:

Simplification of summary KPI template

One static template for summary information, which will merge in one template instead of three the summary KPIs presented according to current rules in ‘per activity information’ reporting, while the ‘per activity’ templates provide for more detailed sectoral breakdowns.

Are also removed: summary information on non-eligible activities, information per objective (eligible activities, eligible but not aligned activities, transitional and enabling activities), separate reporting on datapoints for DNSH and minimum safeguards for Taxonomy-aligned activities.

A new column is introduced to provide transparency on the non-assessed proportion of the denominator of the respective KPIs that non-financial undertakings consider as not material.

Simplification of ‘per activity’ information

For Taxonomy-aligned activities, the changes introduce the reporting of one activity per row, suppressing:

  • reporting on separate rows on the portions of activity aligning with different environmental objectives;
  • reporting separately on DNSH and minimum safeguards, any contribution to multiple environmental objectives;
  • reporting of explicit information for non-aligned activities (these can be still derived implicitly from the datapoints that remain).

Suppression of Annex XII

The entire Annex XII with the separate templates on the performance and exposures to the fossil gas and nuclear activities will be suppressed.

The non-financial undertakings will report on those activities, where material in the ‘per activity’ template.

Financial undertakings will report on those activities, where relevant, in an aggregate form in their standard template which will reduce the number of reported cells from 166 to 4 per KPI.

Introduction of a de minimis materiality threshold of 10 %

A de minimis threshold of 10 % will allow reporting companies to focus their efforts on assessing the taxonomy-eligibility and alignment of activities that represent a significant share of their revenues, CapEx or CapEx, and how they contribute to their transition efforts.

For non-financial companies, activities are considered non-material if they account for less than 10% of a company’s total revenue, capital expenditure (CapEx) or operational expenditure (OpEx).

In addition, non-financial companies are exempt from assessing Taxonomy alignment for their entire operational expenditure when it is considered non-material for their business model.

—

The Delegated Act will now be transmitted to the European Parliament and the Council for their scrutiny. The changes will apply once the scrutiny period of 4 months, which can be prolonged by another 2-month period, is over.

The simplification will apply as of 1 January 2026 and will cover the 2025 financial year – with the option to start with the 2026 financial year if reporting company finds this more convenient.

Links to the Delegated Act and the press release:

https://ec.europa.eu/commission/presscorner/api/files/document/print/en/ip_25_1724/IP_25_1724_EN.pdf

https://finance.ec.europa.eu/document/download/e70bf7cb-31fd-48ef-b03f-b2de9cb56e7f_en?filename=taxonomy-regulation-delegated-act-2025-4568_en.pdf

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