Posted on August, 01 2025

While the overall quality of the proposal is encouraging, the limited scope and rushed timeframe mandated by the European Commission¹ severely constrained the evidence-based process, raising doubts about the ESRS’s ability to monitor progress and ensure transparency on impacts to people and nature.

“The Commission’s approach in the Simplification Omnibus I weakens much-needed and carefully negotiated Green Deal laws and creates regulatory uncertainty for the market by introducing changes that are hasty and lacking evidence,” said Mariana Ferreira, Sustainable Finance Policy Officer at WWF EU. “Through these modifications, there is a significant risk that regulations will end up less coherent and comprehensible, with a focus placed on cutting down text and obligations rather than on increased correspondence between laws, and the development of guidance and tools to assist economic actors in the successful implementation of EU regulation. This could lead to a significant slowdown of the green transition for EU companies.”

The ESRS have served as a global benchmark for sustainability reporting, offering the most comprehensive and integrated framework to date. However, the revised version is even more condensed, with just 370 datapoints – a 60%-70% reduction. For comparison, the International Financial Reporting Standards (IFRS) 1 and 2 require around 335 datapoints combined, despite focusing primarily on general and climate-related disclosures, with limited coverage of social and broader environmental issues. In contrast, the ESRS still cover the full spectrum of environmental, social, and governance (ESG) topics.

The Commission’s request for a reduced word count and number of data points in the ESRS does not necessarily result in simpler or better standards. In fact, EFRAG resorted to removing optional disclosures, guidance, and explanatory content in order to meet this goal. However, these elements were vital in helping companies gradually improve their reporting, appropriately adapt, and build capacity over time. In many cases, the removed guidance provided the depth and clarity needed to ensure that reported information was both meaningful and comparable. If done well, standardised frameworks lower costs, ensure comparability, and enable the reporting exercise to focus on the true impacts and risks of a company. 

“Length and simplicity are not mutually exclusive. Climate Transition Plans are a prime example of this: despite being longer than their European counterpart, the ACT² guidance is widely used thanks to its clarity, detail, and practical usability. In the EU, EFRAG’s development of guidance specific to this topic was paused as part of the broader simplification efforts and due to the uncertainty surrounding the Omnibus process. Yet for complex topics like transition planning, well-structured guidance is not just helpful – it is essential,” said Mariana Ferreira. “It supports consistent implementation across companies and, paradoxically, can make compliance less burdensome by reducing ambiguity.”

WWF acknowledges EFRAG’s efforts to maintain a transparent and participatory revision process despite the extremely tight process. As a member of EFRAG and the Technical Expert Group, we will continue to advocate for the high level of ambition originally envisioned for the ESRS.

^{¹: In late March, the Commission mandated EFRAG to revise the ESRS Set 1, including a public consultation, by the end of October 2025. It was then slightly postponed to the end of November.
²:  ACT is a pioneering international initiative that creates a “climate accountability” framework to evaluate companies‘ transition plans.}

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NOTES TO EDITORS:
The revised ESRS draft falls short on delivering meaningful environmental and nature-related disclosures beyond the topic of climate. WWF highlights three critical shortcomings:

• Restriction of disclosures to own operations
  The Corporate Sustainability Reporting Directive (CSRD) explicitly recognises the relevance and importance of analysing impacts and risks linked to companies’ value chains. While this is still referenced at the conceptual level in the ESRS, the requirements around value chain reporting have been significantly weakened. This is likely to lead to only a partial vision of companies’ sustainability-related risks and impacts, notably on nature, where much of the EU industry’s effects are exported beyond its borders. 
• Watered-down requirements around site-level nature disclosures
  The original version of the ESRS required site-level analysis and disclosure of certain site-specific policies, actions, targets and metrics linked to pollution, water use or biodiversity within topical standards. The requirements have now disappeared altogether from the standards on pollution and water, and have been weakened under the biodiversity standard. Instead, specific dispositions were incorporated into ESRS 2, but with significantly less ambition and detail, and no obligation to report when companies do not perform or report on site-level impacts. This is likely to reduce the quality of site-level analysis and disclosure by companies, which is essential to understand their impacts on nature and people, which tend to be highly dependent on local context. 
• Lack of specific metrics and guidance regarding biodiversity
  Companies are still expected to report biodiversity metrics when material, but disclosure and application requirements lack specific metrics. This is likely to diminish consistency, increase complexity, and ultimately fail to reduce reporting burdens as well as information quality and comparability. This same logic is also reflected in the disclosure requirement on biodiversity transition plans, which remain voluntary even when biodiversity is deemed material by companies. Much like for metrics, there is no mention of guidance or resource examples that could help companies structure their transition plan (i.e. guidance from TNFD, recommendations by WWF, World Economic Forum and GFANZ…), disclosure or application requirements.