Sustainability Reporting: Key Updates for the financial sector
Recent changes in sustainability reporting are expected to reshape the financial industry by simplifying processes, reducing administrative work, and improving data quality. These updates present both challenges and opportunities for stakeholders. Here are the key developments in 2025 industry professionals need to know.
EFRAG's Revised ESRS Exposure Drafts: Simplifying Sustainability Reporting
The European Financial Reporting Advisory Group (EFRAG) has launched a 60-day public consultation on revised drafts of the European Sustainability Reporting Standards (ESRS). Mandated by the European Commission, these revisions aim to simplify sustainability reporting by refining the Double Materiality Assessment, improving readability, and enhancing interoperability with global standards. A thorough 'bottom-up' review prioritizes core data, ensuring direct relevance and usefulness in decision-making. The consultation period runs until September 29, with EFRAG set to provide technical advice to the European Commission by the end of November.
EFRAG's Revised ESRS Exposure Drafts
EU Taxonomy: Cutting Red Tape for Companies
On July 4, 2025, the European Commission adopted measures to simplify the EU taxonomy, a classification system for sustainable economic activities and investments. These changes, presented as a Delegated Act, aim to reduce administrative burdens by amending Taxonomy Disclosures and Climate and Environmental Delegated Acts, including updates to reporting templates and KPIs. Initially part of the Omnibus I package, these measures will apply from January 1, 2026, covering the 2025 financial year, with an option for early adoption in 2026.
Voluntary Sustainability Reporting for SMEs
Recognizing the role of small and medium-sized enterprises (SMEs) in the value chains of larger companies, the European Commission has introduced a voluntary sustainability reporting standard for SMEs. Developed by EFRAG, this initiative aims to ease the reporting burden on SMEs, which may be indirectly affected by the mandatory reporting requirements of the Corporate Sustainability Reporting Directive (CSRD).
"Quick Fix" for Corporate Sustainability Reporting
The European Commission has adopted a "quick fix" for companies already engaged in corporate sustainability reporting. Wave one companies, which began reporting for the 2024 financial year, will not need to provide additional information for subsequent years. Companies with more than 750 employees will benefit from phase-in provisions similar to those for smaller companies, offering a smoother transition.
FinDatEx's Updated European ESG Template
FinDatEx has released version 1.1.3 of its European ESG Template (EET), incorporating minor amendments to align with ESMA fund naming guidelines and PAB and CTB compliance. Notably, data field 580 has been updated to reflect changes in the German MiFID ESG target market concept. Stakeholders are encouraged to adopt version 1.1.3 by January 1, 2025, with version 1.1.2 set for decommissioning by July 1, 2025.
At IDS, we are committed to supporting our clients in navigating these complex regulatory landscapes. Our comprehensive ESG solutions are designed to meet all sustainability reporting requirements, ensuring transparency and compliance. Contact our experts to learn more about how we can assist you in adapting to these changes and optimizing your sustainability reporting processes.
