New simplifications in sustainability reporting

By: Trademagazin Date: 2025. 08. 18. 12:24

On July 11, 2025, the European Commission adopted an amendment to the sustainability reporting rules (“ESRS”), which specifically provides transitional relief for large, publicly listed companies falling under Wave 1. This step marks an important milestone, as these companies had not previously benefited from the postponement granted by the earlier “stop-the-clock” directive. Dr. András Balásfalvi-Kiss, Partner and Head of ESG and Sustainability Services at Grant Thornton, provides professional guidance on the subject.

Why was the amendment necessary?

Since 2023, the Corporate Sustainability Reporting Directive (CSRD) has required large companies to publish detailed sustainability information in line with the European Sustainability Reporting Standards (ESRS). However, the implementation of these rules has placed a significant administrative burden on companies. The goal of EU institutions is clear: to reduce reporting obligations, particularly for smaller and medium-sized players, and to make the system operate more smoothly.

Who benefits from the new relief?

The new “quick fix” delegated legal act applies to large companies that:

are part of Wave 1 (publicly listed companies with more than 500 employees),
started ESRS reporting on or after January 1, 2024,
and have up to 750 employees, or in some cases more than 750 employees.

What areas are affected by the relief?

For companies with fewer than 750 employees:

The option to omit certain data that was already applicable for 2024 has been extended to 2025 and 2026.

These data include:

Scope 3 and total greenhouse gas emissions
ESRS E4 – Biodiversity and ecosystems
ESRS S1 – Own workforce
ESRS S2 – Workers in the value chain
ESRS S3 – Affected communities
ESRS S4 – Consumers and end-users

For companies with more than 750 employees:

These companies may omit the full data content of ESRS E4, S2, S3, and S4 standards, as well as certain elements of S1, in their 2025 and 2026 reports.

Dr. András Balásfalvi-Kiss, Partner and Head of ESG and Sustainability Services at Grant Thornton, points out an important exception: the reliefs do not apply to reporting periods starting before January 1, 2025. Therefore, if a company’s financial year began in 2024 and ends on or before December 31, 2025, it must still comply with the full original set of requirements.

What does this mean in practice?

For the affected companies, the decision frees up time and resources, allowing for a more gradual implementation of sustainability reporting systems. This is particularly useful amid the ongoing ESRS review, as companies will not have to implement requirements that may later be revised within a short timeframe.

At the same time, the effective date may create uncertainty for large companies with non-calendar fiscal years, as they may have to comply with the full set of requirements for a year before being able to benefit from the reliefs.

“The European Commission’s ‘quick fix’ clearly eases the administrative burden on Wave 1 companies and provides breathing space to fine-tune reporting processes. While the relief cannot always be applied immediately, the direction of change is clear: fewer burdens, more focus on the essential sustainability objectives,” summarizes Dr. András Balásfalvi-Kiss.