The current state of the European Sustainability Reporting Standards
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The European Sustainability Reporting Standards (ESRS) have become a cornerstone of sustainability reporting in Europe. For sustainability consultants and ESG experts, they shape not only disclosure requirements, but also how organisations structure governance, manage data and prepare for assurance.
At the same time, ESRS are still evolving. With EFRAG delivering its final technical advice on simplified ESRS in December 2025, the market is navigating a transitional phase: the standards are in force, but their future form is not jet fully settled.
What Is ESRS?
The European Sustainability Reporting Standards are the mandatory sustainability reporting standards developed under the Corporate Sustainability Reporting Directive (CSRD). They were designed by EFRAG to align sustainability reporting across the European Union and to make ESG information more comparable, consistent and decision-useful.
A defining characteristic of ESRS is the principle of double materiality. Companies must report both on how sustainability matters affect their financial performance and on how their own activities impact people and the environment. This changes sustainability reporting from a narrative exercise into a structured, evidence-based discipline.
The standards cover the full ESG spectrum, including:
- Environmental topics: such as climate change, pollution, water and marine resources, biodiversity and resource use
- Social topics: including own workforce, workers in the value chain, affected communities and consumers
- Governance topics: with a focus on business conduct, ethics, risk management and internal controls
Unlike many voluntary frameworks, the ESRS are detailed and prescriptive. They define specific disclosure requirements, data points narrative explanations and are designed to be subject to assurance. As a result, implementing ESRS typically requires changes far beyond the sustainability team, affecting finance, risk, IT, legal and executive governance.
The first set of ESRS was adopted by the European Commission in July 2023 and has applied since 1 January 2024. These standards remain the legal basis for sustainability reporting today.
The Current State of ESRS After EFRAG’s Advice in December 2025
As the implementation of ESRS began, concerns emerged around the complexity and reporting burden, particularly for first-time reporters. In response, the European Commission asked EFRAG to develop simplified ESRS, with the aim of streamlining the standards while preserving the core principles of CSRD and double materiality.
On 3 December 2025, EFRAG delivered its final technical advice to the European Commission on 12 draft simplified ESRS. From a technical perspective, this is a significant milestone. However, it does not mean that the simplified standards are already in force.
It is important to distinguish the difference between technical completion and legal adoption:
- EFRAG’s role is advisory; it does not have the authority to amend the standards
- The European Commission must still prepare a Delegated Act to formally amend the ESRS
- A public consultation will take place, and changes may still occur
- The Delegated Act will be subject to scrutiny by the European Parliament and the Council
Current expectations are that this process will be completed in the first half of 2026. The Delegated Act will also specify the effective date of the simplified ESRS, which could be as early as the 2027 financial year, with reporting in 2028.
Until that point, the original ESRS adopted in 2023 remain fully applicable. This is why the simplified ESRS can be described as “technically final, but politically not yet”.
What Does This Mean for Sustainability Consultants?
For sustainability consultants, the current situation calls for a balanced and well-informed approach. There is no regulatory pause: companies must continue to implement and report under the existing ESRS and advisory work must be firmly grounded in the standards that are legally in force today.
At the same time, the simplified ESRS are highly relevant for forward-looking advice. They provide early insight into how reporting requirements may evolve and where complexity may be reduced. This allows consultants to help clients:
- design reporting processes that are robust under current ESRS but adaptable to future changes
- avoid over-engineering solutions that may soon be simplified
- understand and navigate regulatory uncertainty with confidence
More broadly, this phase reinforces the strategic role of sustainability consultants. Clients increasingly rely on advisors not only for technical interpretation, but also for clear communication, expectation management, and practical translation of regulatory developments into implementation decisions.
ESRS implementation is no longer just about compliance. It is about building reporting architectures that can absorb regulatory change. Consultants who combine regulatory expertise with operational realism and forward-looking thinking will be best positioned to support organisations through the next phase of European sustainability reporting.
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