The European Commission has adopted what it calls ‘targeted quick fix’ amendments to the first set of European Sustainability Reporting Standards (ESRS), with a view to delaying the burden on companies.
The Commission says the amendments also ‘increase certainty for companies that had to start reporting for financial year 2024 (commonly referred to as “Wave One” companies)’.
According to the current ESRS, companies reporting on financial year 2024 can omit information on, amongst other things, the anticipated financial effects of certain sustainability-related risks.
The ‘quick fix’ amendment, which applies from financial year 2025, will allow them to omit that same information for financial years 2025 and 2026.
This means Wave One companies will not have to report additional information compared to financial year 2024. Moreover, for financial years 2025 and 2026, Wave One companies with more than 750 employees will benefit from most of the same phase-in provisions that currently apply to companies with up to 750 employees. The modifications are summarised in this document.
The Commission says the ‘quick fix’ was necessary because Wave One companies were not captured by the “Stop-the-clock” Directive, which delayed by two years the sustainability reporting requirements for companies that report from financial year 2025 and 2026 (so-called “Wave Two” and “Wave Three” companies). This Directive was part of the ‘Omnibus I’ package adopted by the Commission at the end of February 2025.
Meanwhile, the EU executive says it is working on a broader revision of the European Sustainability Reporting standards (ESRS), with the aim of substantially reducing the number of data requirements, clarifying provisions deemed unclear and improving consistency with other pieces of legislation. It is expected that this review will be completed by financial year 2027.
