ESMA advises EC to make some adjustments to the revised ESRS

ESMA has issued its opinion on EFRAG’s draft revised European Sustainability Reporting Standards (ESRS), strongly supporting the European Commission’s (EC) objective to simplify reporting and reduce burdens on issuers. ESMA welcomes the proposed improvements in readability, language and format of the standards, and volume of requirements, noting that they better focus reporting on material issues. However, it identifies technical gaps that could weaken investor protection and financial stability and recommends targeted adjustments. These include setting time limits on permanent reliefs, refining transition plan requirements, strengthening reporting on the sustainability competences of administrative, management and supervisory bodies, improving transparency on sustainability-related financial resources, and adjusting from reporting sustainability risks and opportunities for subsidiaries excluded from consolidated financial statements due to immateriality. 

The EC aims to review ESMA’s opinion together with those of the European Banking Authority (EBA), the European Insurance and Occupational Pensions Authority (EIOPA), the European Central Bank (ECB), and other public bodies, with a view to adopting the revised ESRS as a delegated act by summer 2026.

The opinion of ESMA is available via the press release.