The European Securities and Markets Authority (ESMA) has delivered its opinion on the draft revised European Sustainability Reporting Standards (ESRS) developed by EFRAG, supporting the European Commission’s objective of simplifying reporting requirements while recommending targeted amendments.
ESMA said the proposed revisions improve readability, structure and reduce the volume of requirements, with greater focus on material matters. However, it warned that certain technical issues mean the draft standards only partly meet objectives related to investor protection and financial stability.
ESMA Chair Verena Ross said: “ESMA supports the aim of achieving simplification and burden reduction for issuers and believes EFRAG’s revision of the ESRS is a decisive step in the right direction, even if we see room for some targeted improvements.
“In the current Omnibus transition context, and consistent with our previous statements, ESMA and national competent authorities are committed to pragmatic supervision of sustainability reporting. This will reduce unnecessary burden while still ensuring that the right information reaches investors and the wider market.”
In its opinion, ESMA advised the Commission to introduce time limits to certain permanent reliefs, refine requirements on transition plans, strengthen disclosures on sustainability competences within management and supervisory bodies, enhance transparency on financial resources allocated to sustainability actions, and adjust exemptions related to subsidiaries excluded from consolidated accounts on immateriality grounds.
Separately, the EBA published its own opinion on the draft amended ESRS, acknowledging progress in simplifying elements of the original standards but raising concerns over the permanent nature of certain reliefs.
The EBA said it supports efforts to reduce compliance costs but called for time limits on some alleviations and continued analysis of sustainability-related risks by institutions. It warned that the cumulative effect of permanent reliefs could significantly reduce the amount of quantitative information disclosed, potentially shifting the burden onto users such as banks.
The authority also noted that companies within the scope of the revised Corporate Sustainability Reporting Directive (CSRD), typically large and well-resourced undertakings, should be able to meet reporting requirements. It cautioned that unlimited reliefs could undermine interoperability with international sustainability standards and increase reliance on bilateral information requests by financial institutions.
The Commission will now consider ESMA’s views alongside opinions from the European Banking Authority (EBA), the European Insurance and Occupational Pensions Authority (EIOPA), the European Central Bank (ECB) and other public bodies, with the aim of adopting the revised ESRS through a delegated act by summer 2026.
The ESRS were originally adopted under the CSRD. In 2025, the European Commission requested EFRAG to provide technical advice on simplifying the first set of ESRS. Following a public consultation in summer 2025, EFRAG published draft amended standards in December 2025.
