ESMA Opinion on Revised European Sustainability Reporting Standards

ESMA has delivered its opinion on the draft revised European Sustainability Reporting Standards (ESRS) developed by EFRAG. While ESMA strongly supports the objective of simplification and burden reduction for issuers, it identifies specific technical issues and suggests targeted adjustments to the revised ESRS. These recommendations include introducing time limits for certain reliefs, refining requirements on transition plans, strengthening reporting on sustainability competences of management bodies, enhancing transparency on financial resources allocated to sustainability actions, and adjusting exemptions for subsidiaries.

These recommendations are aimed at ensuring the revised ESRS partly meet the objective of supporting investor protection and financial stability. The European Commission will consider ESMA's opinion, along with those from other European authorities, with the aim of adopting the revised ESRS into a delegated act by summer 2026. Companies should be aware that the first years of ESRS application will involve a learning curve, and ESMA and national competent authorities will ensure proportionate and harmonised supervision during this adjustment period.