Du finner en svensk översättning nedan

The European Financial Reporting Advisory Group (EFRAG) has proposed a simplified set of European Sustainability Reporting Standards (ESRS).

The objective: make sustainability reporting under the CSRD more manageable while preserving its relevance and alignment with the European Green Deal.

In the proposal,

• Mandatory datapoints (to be reported if material) have been cut by 57%.
• The full set of disclosures—mandatory and voluntary— have been reduced by 68%.
• The overall length of the standards has been shortened by over 55%.

In part, this has been achieved by taking datapoints out of the core standards and moving them to a non-mandatory implementation guidance section.

This eliminates excessive mandatory granularity by effectively adopting a more principle-based standard setting approach, leaving more flexibility for companies (but potentially less specific and useful disclosures for the report users).

Patrick de Cambourg, Chair of the EFRAG Sustainability Reporting Board, wrote:

“Capitalising on effective experience, this is about making ESRS a more workable reality—so that sustainability reporting supports, rather than hinders, resilience, investment, and long-term value creation.”

EFRAG focused on cutting complexity and improving usability, drawing upon over 800 survey responses and stakeholder engagements.

This includes:

• streamlining the Double Materiality Assessment,
• reducing overlaps across standards,
• clarifying language and structure,
• removing all voluntary disclosures,
• introduction of new relief mechanisms, such as exemptions where reporting would cause undue cost or effort.

A 60-day public consultation has been launched, from 31 July to 29 September 2025, inviting stakeholders—including preparers, auditors, civil society, investors, and national authorities—to review and provide feedback on the revised drafts.

⭕ Access the draft standards and have your say here: https://www.efrag.org/en/amended-esrs-0

EFRAG will organise or co-organise outreach events throughout September and October, gathering further feedback ahead of its final technical advice to the European Commission, due by 30 November 2025.

In parallel, EFRAG performs a cost benefit analysis and targeted field tests which are also open to participation from stakeholders.

Future Steps 👉

• Final Drafts: Expected by November 30, 2025.
• Commission Adoption: Anticipated in 2026.
• Implementation Timeline: Revised ESRS will not apply to the fiscal year 2025.

We will analyze the changes proposed in these simplified versions and share our findings with you. And of course, we will remain at your side to help you adopt these new versions, once they are finalized and come into effect.

Thank you for your trust!

—SWEDISH VERSION—

Den europeiska rådgivande gruppen för finansiell rapportering (EFRAG) har föreslagit en förenklad uppsättning europeiska standarder för hållbarhetsrapportering (ESRS).

Målet: att göra hållbarhetsrapporteringen enligt CSRD mer hanterbar samtidigt som dess relevans och överensstämmelse med den europeiska gröna given bevaras.

I förslaget har:

• Obligatoriska datapunkter (som ska rapporteras om de är väsentliga) minskats med 57 %.

• Hela uppsättningen upplysningar – obligatoriska och frivilliga –minskats med 68 %.

• Standardernas totala längd förkortats med över 55 %.

Detta har delvis uppnåtts genom att datapunkter tagits bort från kärnstandarderna och flyttats till ett icke-obligatoriskt avsnitt med implementeringsvägledning.

Detta eliminerar överdriven obligatorisk granularitet genom att effektivt anta en mer principbaserad standardiseringsmetod, vilket ger mer flexibilitet för företagen (men potentiellt mindre specifika och användbara upplysningar för rapportanvändarna).

Patrick de Cambourg, ordförande för EFRAG:s styrelse för hållbarhetsrapportering, skrev:

“Genom att dra nytta av effektiv erfarenhet handlar detta om att göra ESRS till en mer praktisk verklighet – så att hållbarhetsrapportering stöder, snarare än hindrar, motståndskraft, investeringar och långsiktigt värdeskapande.”

EFRAG fokuserade på att minska komplexiteten och förbättra användbarheten, med hjälp av över 800 enkätsvar och intressentengagemang.

Detta inkluderar:

• effektivisering av den dubbla väsentlighetsbedömningen,

• minskning av överlappningar mellan standarder,

• förtydligande av språk och struktur,

• borttagande av alla frivilliga upplysningar,

• införande av nya lättnadsmekanismer, såsom undantag där rapportering skulle orsaka orimliga kostnader eller ansträngningar.

Ett 60-dagars offentligt samråd har inletts, från 31 juli till 29 september 2025, där intressenter – inklusive förberedare, revisorer, civilsamhället, investerare och nationella myndigheter – bjuds in att granska och ge feedback på de reviderade utkasten.

⭕ Ni hittar utkastet till standarder och kan ge feedback här: https://www.efrag.org/en/amended-esrs-0

EFRAG kommer att organisera eller samorganisera utåtriktade evenemang under september och oktober för att samla in ytterligare feedback inför sitt slutgiltiga tekniska råd till Europeiska kommissionen, som ska lämnas senast den 30 november 2025.

Parallellt utför EFRAG en kostnads-nyttoanalys och riktade fälttester som också är öppna för deltagande från intressenter.

Framtida steg 👉

• Slutgiltiga utkast: Förväntas senast den 30 november 2025.
• Antagande av kommissionen: Förväntas 2026.
• Tidslinje för implementering: Reviderade ESRS kommer inte att tillämpas för räkenskapsåret 2025.

Vi kommer att analysera de ändringar som föreslås i dessa förenklade versioner och dela våra slutsatser med er. Och naturligtvis kommer vi att finnas vid er sida för att hjälpa er att anta dessa nya versioner, när de är färdigställda och trätt i kraft.

Tack för ditt förtroende!

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.

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

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

#getCSRDready, #CSRD, #ESRS, #ESG, #Strategy, #Governance, #SustainabilityReporting, #Digitalisation, #Cleerit

The European Sustainability Reporting Standards (ESRS), for use by all companies subject to the CSRD, are built on a double materiality approach, whereby impact materiality and financial materiality are equally important – the exception being negative impact on human rights which one could argue takes precedence.

ESRS (drafted by EFRAG, technical advisor to the European Commission) state that a company’s impact on people and the environment, and its financial effects from risks and opportunities, arising from its dependencies on resources and relationships, may be inter-related and interdependent.

A negative impact will likely materialize as a negative financial effect for the company, at least in the long term. But a company also faces sustainability related risks that are not necessarily related to its impacts – climate change being a good example.

The International Financial Reporting Standards on Sustainability (IFRS-sds), issued by ISSB, also recognize that the two perspectives are linked: “an entity’s ability to generate cash flows over the short, medium and long term is inextricably linked to the interactions between the entity and its stakeholders, society, the economy and the natural environment throughout the entity’s value chain. … Together, the entity and the resources and relationships throughout its value chain form an interdependent system in which the entity operates.” (S1, paragraph 2)

So, what are the main differences between the two standards – apart from IFRS-sdc only covering one topic (climate change) in stage one, compared to 10 ESG topics for ESRS?

And how do TCFD, SASB and GRI fit in the picture?

IFRS Sustainability by ISSB

The International Sustainability Standards Board (ISSB) was created by the IFRS Foundation in 2021 as a sister board to the International Accounting Standards Board (IASB), to address the needs of investors and the financial markets for sustainability information – in particular sustainability-related risks and opportunities that are becoming increasingly important for investment decisions.

ISSB’s main objective is to respond to the need for such information by issuing unified IFRS Sustainability standards (IFRS-sds), since a fragmented landscape of voluntary, sustainability-related standards and requirements add cost, complexity and risk to both companies and investors.

The aim is to help companies to report what is needed for investors across markets globally, to support investor decision-making and facilitate international comparability to attract capital.

ISSB has focused on ensuring transparency through the disclosure of the company’s sustainability related risks and opportunities, and related control systems – including who is in charge, how do they get relevant information and if they have the necessary skills to manage this information and its consequences for the company’s strategy and business model.

Materiality follows the same principle as the IFRS Accounting Standards definition of “material”: “could reasonably be expected to influence investor decisions”.

This is logical since the IFRS-sds stakeholder is “primary users of general-purpose financial reports in making decisions relating to providing resources to the entity” – meaning the investors.

Sue Lloyd (Vice Chair ISSB) explained that the IFRS-sds standards aim to help companies and their investors, identify “how sustainability can affect its prospects”, by focusing on “how it maintains its resources and relationships, how it manages its dependencies on them, and how its impacts on these resources and relationships give rise to sustainability related risks and opportunities for the company”.

The company’s impact on the environment and people therefore only becomes relevant (material) if likely to translate into financial effects for the company.

IFRS-sds does not require companies to disclose a specific climate transition pathway aligned with common objectives like net zero or the 1.5-degree scenario – although they indirectly encourage to do so.

As Sue Lloyd put it: “The role of ISSB is providing information to investors, not to tell companies how to do business, have transitions plans, etc”.

It is also important to note that while IFRS-sds aim to shed light on the resilience of the entity’s strategy and its business model with regards to sustainability-related risks, an entity need not provide quantitative information about the current or anticipated financial effects of a sustainability-related risk or opportunity if the entity determines that:

• those effects are not separately identifiable
• the level of measurement uncertainty involved in estimating those effects is so high that the resulting quantitative information would not be useful
• the entity does not have the skills, capabilities or resources to provide that quantitative information (S1 paragraphs 38-39).

Since the first set of IFRS-sds only cover the topic climate change, it refers to the topical SASB standards (in step one), organized by industry, to help companies identify other topics that could potentially give rise to sustainability related material risks and opportunities, and related disclosures.

—

Sustainability Accounting Standards Board (SASB)  

The Sustainability Accounting Standards Board (SASB) was founded as a nonprofit organisation in 2011 to help businesses and investors develop a common language about the financial impacts of sustainability.

SASB Standards help companies disclose relevant sustainability information to their investors. They are industry-based as risks and opportunities likely to be “decision-useful” for investors vary by industry.

Available for 77 industries, SASB Standards aim to help identifying the sustainability-related risks and opportunities most likely to affect an entity’s cash flows, access to finance and cost of capital over the short, medium or long term and the disclosure topics and metrics that are most likely to be useful to investors.

From CDSB, IIRC and TCFD to SASB and ISSB

The Climate Disclosure Standards Board (CDSB), created in 2007, offered companies a framework for reporting environment and social information with the same rigour as financial information. The CDSB Framework formed a foundation for the Task Force for Climate-Related Financial Disclosures (TCFD) recommendations and sets out an approach for reporting environmental and social information in mainstream reports, such as annual reports, 10-K filing, or integrated reports.

The International Integrated Reporting Council (IIRC), a global coalition of regulators, investors, companies, standard setters, the accounting profession and NGOs, was formed in August 2010 with the aim to create a globally accepted framework for a process that results in communications by an organisation about value creation over time, as the next step in the evolution of corporate reporting.

The Financial Stability Board (FSB) created the Task Force on Climate-related Financial Disclosures (TCFD) in 2015 to improve and increase reporting of climate-related financial information.

Over the years, the corporate sustainability disclosure landscape became very complex. Many global businesses and investors called for simplification and clarity in this landscape.

In response, in November 2020 the International Integrated Reporting Council (IIRC) and the Sustainability Accounting Standards Board (SASB) announced their intention to merge into the Value Reporting Foundation, which was officially formed in June 2021. By integrating two entities that were focused on enterprise value creation, the merger signaled significant progress towards simplification.

On 3 November 2021 at the COP26 climate conference the IFRS Foundation Trustees announced the consolidation of the Value Reporting Foundation (VRF) and the Climate Disclosure Standards Board (CDSB) into the IFRS Foundation, to support the work of the newly established International Sustainability Standards Board (ISSB).

As of August 2022, the International Sustainability Standards Board (ISSB) of the IFRS Foundation assumed responsibility for the SASB Standards. The ISSB has committed to maintain, enhance and evolve the SASB Standards and encourages preparers and investors to continue to use the SASB Standards.

In July 2023 the Financial Stability Board (FSB) announced that the work of the Task Force on Climate-related Financial Disclosures (TCFD) has been completed, with the ISSB Standards marking the ‘culmination of the work of the TCFD’. Having fulfilled its remit, TCFD disbanded in October 2023.

Companies applying IFRS S1 General Requirements for Disclosure of Sustainability-related Financial Information and IFRS S2 Climate-related Disclosures will meet the TCFD recommendations as the recommendations are fully incorporated into the ISSB Standards (and into ESRS). The FSB has asked the IFRS Foundation to take over the monitoring of the progress of companies’ climate-related disclosures.

Companies can continue to use the TCFD recommendations should they choose to do so, and some companies may still be required to use the TCFD recommendations. Using the recommendations can be a good entry point for companies as they move to use the ISSB Standards (or ESRS).

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The IFRS-sds standards are voluntary and policy-agnostic

More than 20 jurisdictions have already decided to use or are taking steps to introduce ISSB’s IFRS Sustainability Standards (sds) in their legal or regulatory framework, including Australia, Brazil, Canada, Hong-Kong, Japan, Malaysia, Mexico, Singapore, South Korea and the UK. Together, these jurisdictions account for nearly 55% of global GDP, more than 40% of global market capitalisation and more than half of global greenhouse gas emissions.

IFRS-sds standards have also been endorsed by the International Organization of Securities Commissions (IOSCO), calling on its 130 member jurisdictions — capital markets authorities that regulate more than 95% of the world’s securities markets — to consider how they can incorporate the ISSB Standards into their respective regulatory frameworks.

However, supervisory authorities of EU Member States represent over 20% of IOSCO membership, and they will be subject to ESRS standards.

The UK has also committed to its own Transition Plan Taskforce (TPT) Disclosure Framework – “a key building block for delivering a net zero future” – in addition to the IFRS-sds requirements. The TPT builds on the work of the ISSB and supports compliance with IFRS S2.

Unified sustainability reporting practices are an important step towards “more resilient economics, serving people and life better”, as noted by ISSB Chair Emmanuel Faber.

Critics accuse the ISSB of “high-jacking” sustainability reporting by claiming the IFRS-sds standards to be a “global baseline”, while narrowly focusing on only one stakeholder (the investor), and neither addressing sustainability per se, nor the management and science-based alignment of sustainability-related issues.

The ESRS standards are forward-driven and support the European Green Deal

The aim of ESRS (Set 1) is more ambitious, and forward-driven. It’s not policy neutral. Together with CSRD, it supports the European Green Deal, a growth strategy for the 27 EU member states.

The EU standards are based on an initial draft prepared by the appointed technical adviser, the European Financial Reporting Advisory Group (EFRAG), following the adoption of the EU Corporate Sustainability Reporting Directive (CSRD), supplementing the directive 2013/34/EU on annual financial statements, consolidated financial statements and related reports.

CSRD now requires companies within its scope to report based on a double materiality approach in compliance with the European Sustainability Reporting Standards (ESRS), adopted by the European Commission as delegated acts.

The aim is not only to help companies to communicate (disclose) sustainability related information, but also to manage their sustainability performance more efficiently, and therefore to have better access to sustainable finance to support the implementation of the European Green Deal.

The European Green Deal represents a growth strategy that aims to “transform the Union into a fair and prosperous society, with a modern, resource-efficient and competitive economy where there are no net emissions of greenhouse gases in 2050 and where economic growth is decoupled from resource use”.

The implementation of the European Green Deal requires that “investors are offered clear, long-term signals to avoid stranded assets and to raise sustainable finance”.

CSRD therefore requires large companies, as well as third-country companies with significant activities in the EU, to disclose information on what they see as the risks and opportunities arising from social and environmental issues, and on the impact of their activities on people and the environment.

The definition of a “large” company is currently being reviewed as part of the Omnibus simplification package.

The aim is to help investors, civil society organisations, consumers and other stakeholders to evaluate the sustainability performance of companies, as part of the European Green Deal.

The aim of the European Green Deal is to improve the well-being and health of citizens and future generations by providing:

• fresh air, clean water, healthy soil and biodiversity
• renovated, energy efficient buildings
• healthy and affordable food
• more public transport
• cleaner energy and cutting-edge clean technological innovation
• longer lasting products that can be repaired, recycled and re-used
• future-proof jobs and skills training for the transition
• globally competitive and resilient industry

To achieve the goals, the ESRS address the needs of a large group of stakeholders:

• Affected stakeholders: individuals or groups whose interests are affected or could be affected – positively or negatively – by the undertaking’s activities and its direct and indirect business relationships across its value chain (ESRS 1, sec 3.1 par 22 a)
• Users of sustainability statements: primary users of general-purpose financial reporting (existing and potential investors, lenders and other creditors, including asset managers, credit institutions, insurance undertakings), and other users of sustainability statements, including the undertaking’s business partners, trade unions and social partners, civil society and non-governmental organisations, governments, analysts and academics. (ESRS 1, sec 3.1 par 22 b)
• In addition, common stakeholders are: employees and other workers, suppliers, consumers, customers, end- users, local communities and persons in vulnerable situations, and public authorities, including regulators, supervisors and central banks. (ESRS 1, AR 6)
• Nature may be considered as a silent stakeholder. In this case, ecological data and data on the conservation of species may support the undertaking’s materiality assessment. (ESRS 1, AR 7)

This multi-stakeholder approach is consistent with research findings in the fields of corporate strategy and strategy execution.

Companies face many different stakeholders and have to manage different – sometimes contradictory – perspectives to be successful, given the interdependent system in which they operate. This is also why the narrow focus on investors in IFRS-sds has been criticized.

When creating the ESRS, EFRAG (EU) built on – and also aimed to contribute to – internationally recognized existing reporting standards and guidelines, including TCFD, GRI, SASB, the International Integrated Reporting Council (IIRC), the Climate Disclosure Standards Board (CDSB) and CDP (formerly the Carbon Disclosure Project), while also taking into account other science-based guidelines, as well as existing EU regulation and international instruments for responsible business conduct.

TCFD, ESRS and IFRS-sds

The Task Force on Climate Related Financial Disclosures (TCFD) was established in 2015 by the Group of 20 (G20) and the Financial Stability Board (FSB), as a response to the failings of the 2015 Paris Agreement.

One of the most significant problems identified was the lack of transparency and international standards by which countries demonstrate or disclose that they are meeting their commitments.

To address the issues stemming from the 2015 Paris Agreement, the Task Force published recommendations designed to standardise worldwide climate-related disclosures that could “promote more informed investment… and in turn, enable stakeholders to understand better concentrations of carbon-related assets in the financial sectors.”

The TCFD climate-related disclosures provide information to investors about what companies are doing to mitigate the risks of climate change, as well as transparency on the way in which they are governed with relation to these matters.

Both EFRAG and ISSB have incorporated the TCFD climate-related disclosures, so there is no need to report on TCFD separately if you report according to ESRS or IFRS-sdc.

But both ESRS and IFRS-sds go beyond TCFD disclosures, so TCFD alone is no longer enough.

When comparing TCFD with ESRS it must also be noted that TCFD is on climate only and ESRS are covering also numerous other sustainability matters besides climate.

ESRS also include detailed minimum disclosure requirements (MDR) on Policies, Actions and Targets (PATs), designed to shed light on – and guide – impact, risk and opportunity MANAGEMENT, in addition to governance and control mechanisms.

These MDR on Policies, Actions and Targets are absent in both TCFD and IFRS-sds.

GRI, ESRS and IFRS-sds

The Global Reporting Initiative (GRI) was founded in Boston (USA) in 1997 following on from the public outcry over the environmental damage of the Exxon Valdez oil spill, eight years previously.

The aim was to create the first accountability mechanism to ensure companies adhere to responsible environmental conduct principles, which was then broadened to include social, economic and governance issues.

GRI became the world’s first globally accepted, voluntary, standards for sustainability reporting.

Over 10,000 companies from more than 100 countries use GRI. 78% of the world’s biggest 250 companies by revenue (the G250) and 68% of the top 100 businesses in 58 countries (5,800 companies known as the N100) have adopted the GRI Standards for reporting. (KPMG Survey, Oct 2022)

The ESRS have adopted the same definition for impact materiality as GRI and have leveraged GRI’s expertise.

As IFRS-sds, on the other hand, does not incorporate impact materiality, it “delegates” this task to GRI, stating that:

“The combination IFRS-sds, focused on meeting investor needs, alongside GRI standards, focused on broader stakeholder needs, as a package, can be an efficient reporting system to allow companies to report across their stakeholders”. (Sue Lloyd, Vice Chair ISSB)

ESRS interoperability

ESRS – IFRS-sds

EU/EFRAG and the ISSB have ensured a very high degree of interoperability between the two sets of standards. Companies that are required to report in accordance with ESRS will to a very large extent report the same information as companies that use the two ISSB standards IFRS S1 & S2.

Specific consideration has been given to the definition of financial materiality, particularly in ESRS 1 paragraph 48 of the Delegated Act. Material financial information under ESRS is now focused on the needs of primary users (investors), assuming that the needs of other stakeholders are satisfied either through impact materiality information or through the information needed by investors.

For financial materiality, an undertaking that applies ESRS is expected to be able to comply with the identification of the risks and opportunities to be disclosed under IFRS-sds (however, note that EFRAG’s proposed Materiality Assessment Implementation Guidance for public input on August 23 does not state the inverse to be true).

The ESRS follow the same structure as the ISSB (Governance—Strategy—Risk Management—Metrics & Targets), as first proposed by the Task Force on Climate related Financial Disclosures (TCFD), with the necessary adaptions to account for the double materiality principle and to secure an efficient interaction between the general disclosures and the various topics that the ESRS have to cover according to the CSRD.

ESRS – GRI

EU/EFRAG and GRI acknowledge that they have achieved a high level of interoperability between their respective standards in relation to impact reporting.

ESRS and GRI definitions, concepts and disclosures regarding impacts are therefore fully or, when full alignment was not possible due to the content of the CSRD legal mandate, closely aligned.

For impact materiality, an assessment performed under GRI constitutes a good basis for the assessment of impacts under ESRS.

International instruments (UN, OECD)

In an effort to enhance further alignment and convergence for companies in relation to due diligence expectations, ESRS also take account of the international instruments of the UN Guiding Principles on Business and Human Rights and the OECD Guidelines for Multinational Enterprises to the greatest extent possible, as required by the CSRD, without prejudice to the EU legislative processes regarding sustainability due diligence (the EU directive CSDDD).

ESRS – the most comprehensive one-stop-shop sustainability reporting standards

As such, ESRS are currently the most comprehensive one-stop-shop reporting standards for sustainability-related impacts, risks and opportunities – covering 10 topics, including more than 90 sub-topics to be assessed (ESRS 1, AR 16) and potentially material for a company and/or its many different stakeholders.

ESRS are also the only standards requiring assurance.

In addition, ESRS prescribe a scienced-based methodology to increase sustainability strategy execution success, a pre-requisite to improving actual sustainability performance: the activity-based Minimum Disclosure Requirements (MDR, sections 4.2 and 4 in ESRS 2) for Policies, Actions (including resources) and Targets (PATs).

As an example – and going well beyond IFRS S2 – ESRS E1 requires companies (in addition to ESRS 2 MDR-A) to detail climate change mitigation actions taken in the reporting year and planned for the future,

• presented by decarbonisation lever (e.g., energy or material efficiency and consumption reduction, fuel switching, use of renewable energy, phase out or substitution of product and process) including the nature- based solutions
• describing the outcome of the actions for climate change mitigation, including the achieved and expected GHG emission reductions
• relating significant monetary amounts of CapEx and OpEx required to implement the actions taken or planned
• stating whether the GHG emission reduction targets are science- based and compatible with limiting global warming to 1.5°C
• stating which framework and methodology have been used to determine targets and what the underlying climate and policy scenarios are. 

Increasing your chances of succeeding

Reporting is necessary, but if we are looking to transform, reporting is only a means to an end, not the end.

Indeed, time and time again, research findings conclude that strategies only have a 30% chance of succeeding, due to insufficiencies in execution. And failing to build resilient and sustainable business models is not an option.

By applying the inclusive governance model described in the ESRS Minimum Disclosure Requirements, the success rate increases.

Already in the 90’s, the Harvard strategy expert, Michael Porter, described the essence of strategy as “deliberately choosing a different tailored set of activities to deliver a unique mix of value”, and defined strategy as “an activity system”. (Porter, 1996, p. 64, 69-70)

To succeed, companies need to make choices and allocate resources. Resources are “intermediate between activities and advantage”, reflecting “prior managerial choices” (Porter, 1991, p. 108-109).

Empirical research has also confirmed the importance of connecting strategy to day-to-day activities and resource allocation. In successfully executing companies, 77% effectively translate their strategy into operational mechanisms and monitor day-to-day progress (HBR, The Gap Between Strategy and Execution, 2017, p. 62).

So, when disclosing on ESG policies, actions, targets and metrics in accordance with ESRS Minimum Disclosure Requirements, it is important to keep in mind that doing this right will not only help companies with ESRS reporting. It will help them to successfully craft and execute strategies and increase overall performance.

Reporting is only a means to an end, not the end

While all standards concerned with sustainability are important steps in the right direction – if you really want to show the market and your stakeholders that you are serious about sustainability, ESRS is currently your best option.

With a multi-stakeholder approach, and an IRO-, policy-, target- and activity-based methodology, as well as information on key elements of the entity’s strategy that relate to or affect sustainability matters, ESRS provide increased transparency and reliability for management, stakeholders, investors and financial institutions.

If you are aiming for a good ESG rating and access to sustainable finance, now is the time to dig in.

Indeed, the Ellsberg paradox – a deviation from the model of rational choice – is a demonstration that a person “tends to prefer choices with quantifiable risks over those with unknown, incalculable risks”.

In other words, we are more likely to bet on an outcome with unfavorable odds, than on one where we do not know the odds at all.

This goes to show that ignorance of the future carries a cost today: ambiguity makes risks uninsurable, or at the very least expensive. The less insurers know about risks, the more capital they need to protect their balance-sheets against possible losses. The same reasoning is likely to be true also for investors.

ESRS is a major opportunity to build awareness, resilience, efficiency and sustainable growth opportunities.

So, with or without Omnibus, it’s important to keep in mind that reporting is only a means to an end, not the end.

Setting up the management and control systems needed to identify, govern and manage your sustainability-related impacts, risks and opportunities, is needed to future-proof your business and safe-guard your competitive advantage.

And you will need the support of a fit-for-purpose ESRS-ready sustainability strategy, governance & reporting software to guide you, save time, increase decision-usefulness and decrease your burden ➡ Cleerit ESG.

#getCSRDready, #CSRD, #ESRS, #ESG, #Strategy, #Governance, #SustainabilityReporting, #Digitalisation, #Cleerit

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You are welcome to follow our page for more information and advice on CSRD & ESRS: https://www.linkedin.com/company/cleerit

On 5 April 2025 ESMA released a report with key messages on how to improve future non-financial reports, acknowledging a ”current learning phase of the sustainability reporting journey”.

It is based on findings from corporate reporting during 2024 (on FY 2023, prepared in accordance with the Accounting Directive, 2013/34/EU).

The report addresses listed companies in the EEA, auditors and other corporate reporting professionals, with the aim to promote transparency and accountability to the market.

ESMA examined 573 non-financial statements, whereof most (425) related to checking whether the information met the requirements of the Accounting Directive.

This led to enforcement actions related to content towards 121 issuers, causing an action rate of 28%, up from 23% in the previous year.

Most actions required the issuer to make a correction in a future non-financial statement.

22 enforcement actions were also taken, based on the examination of the 137 issuers in the sample, related to the recommendations derived from the 2023 European Common Enforcement Priorities (ECEP).

They were all in the form of requiring the issuer to correct the relevant matter in future non-financial statements.

Enforcement actions

Close to half of all actions related to Article 8 Taxonomy Regulation disclosures – or the lack thereof – followed by disclosures related to non-financial KPIs and description of policies and outcome of policies, due diligence and principal risks.

In particular, the level of specificity of disclosures related climate-related targets and emission reduction targets can be improved, especially in relation to the strategic dimension of the targets, the specific decarbonisation levers used and the financial resources necessary to fulfil the targets.

Overall, the review of the disclosures on targets confirms the importance of relying on sufficiently detailed disclosure rules focusing on minimum basic requirements to enable the comparability of disclosures and the assessment of the credibility of individual issuer’s commitments.

Other actions related to issues such as the reporting perimeter (lack of transparency on it or insufficient coverage of the reporting), reporting on environmental, social and governance (ESG), related governance issues and ESG ratings.

Key findings

Disclosures relating to Article 8 of the Taxonomy Regulation

ESMA refers to these disclosures as having a ”theoretical relevance as a tool to communicate the transition potential of a business”.

• Difficulties were flagged with the application of the activity-based reporting set out in the taxonomy regime for integrated business models or for economic activities whose management is typically outsourced
• Disclosures to explain the methodologies and the conclusions underlying the eligibility and alignment assessments as well as to explain the quantitative information in the reporting templates, most notably on the main taxonomy ratios, did not provide entirely satisfactory.
• The disclosure of CapEx plans remained very limited with sometimes insufficient accompanying contextual information.

Disclosures of climate-related targets, actions and progress

An increased transparency in reporting on climate-related matters is now required, gaining further relevance in light of the forthcoming application  of the enhanced disclosure regime set out in the CSRD.

The Non-Financial Reporting Directive (NFRD) requirements are not specific as to the basic elements that disclosures on targets should contain.

• Many times disclosures lacked basic elements, such as the scope of the target, the baseline value and base year, the underlying methodologies and assumptions and whether the target is based on scientific evidence.
• Explanations of the relationship between the targets and their strategic dimension were often missing for a sizeable part of the sample.
• Many disclosures lacked specificity, e.g., in relation to decarbonisation levers, the science-based nature of the targets and the absence of intermediate milestones.
• The disclosure of financial resources necessary to support the achievement of the targets disclosed was often missing or lacking specificity, for example not providing specific breakdowns to assess the relationship between a specific target and the related investments.

Overall, the review of the disclosures on targets confirms the importance of relying on sufficiently detailed disclosure rules focusing on minimum basic requirements to enable the comparability of disclosures and the assessment of the credibility of individual issuer’s commitments.

Scope 3 emissions

Disclosures on Scope 3 greenhouse gas (GHG) emissions are part of the information that investors would consider as necessary input to sustainable investment decisions.

• Shortcomings remain in terms of transparency on the exclusions from the scope 3 calculation and transparency on the use of estimates to calculate the emissions.
• Only in a minority of cases were disclosures of the gross amounts of GHG emissions provided separately from the effect of carbon credits and other measures.
• Comparative information on scope 3 emissions was in many cases not sufficient to get an understanding of the factors driving the evolution of the reported information.

The lacking or insufficient information will be required under the European Sustainability Reporting Standards (ESRS) which is expected to increase the comparability and overall quality of GHG emissions reporting.

Improve contextual information and explanations of relationships between targets, strategy and related investments

By using ESRS taxonomy-centric report templates and IRO-management models provided in Cleerit ESG, disclosures on contextual information, and explanations of the relationship between the targets, their strategic dimension and the related investments, will be improved – for the benefit of the market and management.

You are welcome to contact us if you want to know more about how leading market actors are enhancing their strategic sustainability governance and reporting > Book a presentation

Source: https://www.esma.europa.eu/sites/default/files/2025-04/ESMA32-193237008-8791_Report_on_2024_Corporate_reporting_enforcement_and_regulatory_activities.pdf

Following the publication of the Omnibus proposals and in line with the European Commissioner Albuquerque’s request, the EFRAG Sustainability Reporting Board (SRB) has approved today its comprehensive and fast-tracked work plan to deliver its technical advice by 31 October 2025 for the revision and simplification of the European Sustainability Reporting Standards (ESRS).

EFRAG’s approach will build on the experience of first-wave companies that implemented ESRS for their 2024 financial year.

📅 Timeline and steps

⭕ April to mid-May 2025

Establishing a vision on actionable levers for substantial simplification (to be confirmed following the stakeholders’ feedback)

Gathering evidence from stakeholders, analysis of the issued reports and other sources – the public call for input is open until Tuesday 6 May

⭕ Second half of May to July 2025

Drafting and approving the Exposure Drafts amending ESRS

⭕ August and September 2025

Publishing the Exposure Drafts, receiving and analysing feedback (including via public consultation) from stakeholders

⭕ October 2025

Finalising and delivering the technical advice to the EC

The work plan is based on the Omnibus proposals as tabled by the EC and does not consider the consequences of changes that may stem from the legislative process. Should changes be made, the timetable and work plan might need to take account of them for the delivery of an appropriate technical advice.

EFRAG has initially identified actionable levers that will be further specified following the evidence gathering phase:

🌿 Revising the presentation and architecture, including the articulation of cross cutting and topical provisions.

🌿 Addressing the most challenging provisions, including the clarification of the application of the materiality principle, to ensure that only material information is required to be reported.

🌿 Evaluating general burden reduction reliefs for ESRS, to reduce the compliance efforts horizontally across disclosures. This may include reliefs for (i) reporting information about acquired businesses and disposals, (ii) certain confidential and possibly business sensitive information and (iii) metrics affected by estimation uncertainty and lack of data quality, including through a broader use of the “undue cost and effort” principle.

🌿 Substantially reducing the number of required datapoints (“shall”), and considering the relevance of disclosure requirements, if need be, with a (not exclusive) focus on narrative disclosures. This critical part of the burden reduction effort will include deletions and transfer of datapoints from a “mandatory” status to a “voluntary” status (“shall” transferred to “may” or to guidance/guidelines or to illustrative examples/educational material). The reduction of datapoints shall be considered from a burden reduction angle as well as from a numerical angle.

Read more here: https://www.efrag.org/sites/default/files/media/document/2025-04/EFRAG%20ESRS%20Revision%20Work%20Plan%20and%20Timeline%20submitted%20to%20the%20EC_25042025.pdf