Developments in Corporate Sustainability Reporting: What Policymakers Should Know Before Changing Legislation

The expert group Frank Bold has published preliminary results of a study that maps the current state of sustainability reporting among 50 major European companies across various sectors – from finance and the textile and energy industries to agriculture, pharmaceuticals, and transportation.

The results show that the introduction of the Corporate Sustainability Reporting Directive (CSRD) and the related European Sustainability Reporting Standards (ESRS) has led to a significant improvement in the quality and clarity of disclosed information. Companies are beginning to report climate targets in a standardized way and are providing more detailed and comparable data on their impacts, risks, and strategies.

Climate goals and greenhouse gas emissions

• The setting of climate targets has become common practice, with many companies committing to climate neutrality in line with European goals.
• Thanks to the ESRS standards, climate plans are now better structured and allow for comparability between companies. Investment intentions and obstacles to implementing climate measures are also being disclosed, although their quality and level of detail still vary.
• Greenhouse gas emissions reporting across all scopes (Scope 1, 2, and 3) has become a standard part of corporate reports, with the ESRS standards supporting improved data quality and consistency across sectors.

Double materiality and due diligence

• The highest-rated reports are those that appropriately reflect the specific context of the company, particularly in relation to the value chain and priority setting.
• Thorough disclosure is directly linked to due diligence processes, whereas less specific reports often remain at a general level without clear ties to actual practice.
• The ESRS standards support a balanced integration of strategic-level insights with specific information on impacts, risks, and opportunities. In practice, however, companies often fail to explain how key topics affect people, the environment, or their own business model.

Legislation in the Context of Current Changes

Currently, the so-called first simplification package (Omnibus on Simplification) proposed by the European Commission is being discussed at the level of the European Parliament. The proposal includes changes that could lead to a loosening of the rules in the area of ESG reporting and due diligence (CSRD and CSDDD).

Experts from Frank Bold warn that this legislative process is being conducted in a fast-tracked manner, without a thorough assessment of the impacts of the proposed changes. According to preliminary analysis results, any weakening of the rules could negatively affect both the quality and transparency of disclosed data, as well as companies’ trust in the predictability of the regulatory framework.

Conclusion and Next Steps

Companies need clarity, stability, and long-term predictability in order to invest in reporting systems that meet the requirements of the market and stakeholders. The ongoing revision of legislation will have a direct impact on companies’ ability to plan effectively in the area of sustainability, as well as on the credibility of the European approach to sustainable finance.

The full research will be published in September 2025, including an overview of good practice examples. You can view the preliminary results here.