CSRD: What You Might Have Missed This Summer
As summer wraps up, it’s time to reconnect with the fast-moving regulatory train. Here’s a quick recap of the major developments that took place over the past few months around the CSRD and the ESRS:
Highlights:
EFRAG published its “State of Play 2025”, offering insight into early CSRD compliance across the EU
Exposure Draft of amended ESRS released, triggering reactions from ISSB and ECB
European Central Bank warns MEPs about risks in the proposed Omnibus Directive
ISSB raises concerns over interoperability issues caused by ESRS simplifications
European Commission issues a “Quick fix” Delegated Act for first-wave companies
95% of companies could be excluded from CSRD, including key sectors for climate transition
CSRD becomes a bargaining chip in EU-US trade talks
“State of Play 2025” by EFRAG: What We’re Seeing So Far
In late July, EFRAG launched the “State of Play 2025” portal, an interactive platform that analyses ESRS reports published by first-wave companies. Based on 656 sustainability reports from across the EU, it presents early trends and practices in CSRD implementation. A statistical dashboard highlights key reporting patterns observed so far.
ESRS Simplification: EFRAG’s Exposure Draft
On 31 July, EFRAG released the much-anticipated revised version of the ESRS. The main goals: to reduce complexity while maintaining alignment with the EU Green Deal.
Following 800+ responses to its consultation, EFRAG proposed:
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A 57% cut in mandatory datapoints (reported only if material)
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A 68% reduction in overall datapoints (mandatory + voluntary)
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A 50% cut in total ESRS length, to improve usability for newly in-scope companies
The draft simplifies double materiality assessments, reduces overlaps, clarifies language and structure, and eliminates most voluntary disclosures.
EFRAG has until 30 November 2025 to submit the final draft to the European Commission, with the public consultation open until 29 September.
ISSB Pushback on Interoperability
The ISSB raised concerns in August that some of the proposed ESRS simplifications could harm alignment with global standards.
One major concern is the optional nature of quantitative disclosures on financial impacts, which the ISSB views as crucial for investors. Emmanuel Faber, ISSB Chair, called out the EU in a LinkedIn post, comparing the EU’s retreat to Nepal’s adoption of stronger climate disclosure requirements.
His key message: “Financial impact disclosures are the bridge to financing the transition.”
The Commission’s “Quick Fix” Delegated Act
On 11 July 2025, the European Commission adopted a quick fix delegated act aimed at easing the burden for first-wave CSRD companies. This includes:
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No additional disclosures required for FY2024
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Larger companies (>750 employees) granted temporary relief measures initially intended for smaller companies (<750)
The rationale: with thresholds potentially rising under the Omnibus Directive, many companies currently in-scope may soon fall out.
Affected disclosures include:
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Financial effects (SBM-3, E1-9, etc.)
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Scope 3 emissions (E1-6)
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Social metrics (S1-7 to S1-15)
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Biodiversity, value chain, and stakeholder-related ESRS (E4, S2-S4)
Our advice: Even if relief applies in the short term, most of these requirements remain in the revised ESRS. It is wise to begin preparing for FY2025 disclosures now, especially on underdeveloped topics.
Shrinking the Scope: Who Will Still Be Covered by CSRD?
The Omnibus Directive proposal from February 2025 suggested increasing the employee threshold from 500 to 1,000, reducing the number of in-scope companies from ~50,000 to fewer than 10,000.
The Council of the EU added a revenue threshold of €450M, and the European Parliament’s lead rapporteur proposed going even further: 3,000 employees + €450M net revenue.
A final decision will follow plenary votes and trilogues later this year.
A study by Copenhagen Business School and University College Dublin estimates that:
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Many high-impact sectors (e.g. agriculture, real estate) could see >90% reduction in CSRD coverage
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Health and social services sectors may retain ~40% of in-scope firms
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Employee-based thresholds risk excluding financially impactful firms with smaller headcounts
ECB and Geopolitics: New Pressures on the CSRD
The European Central Bank expressed concern to MEPs about the implications of narrowing the CSRD scope, warning that lower data coverage could impact its climate risk modelling.
Meanwhile, a EU-US trade deal reached in August saw the CSRD and CSDDD become part of diplomatic trade-offs. The EU has pledged to ensure neither directive creates “excessive trade restrictions” — raising fears of regulatory softening under US pressure.
The American Chamber of Commerce to the EU (AmCham EU) had previously warned that failure to act boldly could undermine investment and sustainability objectives.
For now, non-EU companies exceeding €150M in EU revenue (via subsidiaries or branches) remain in scope by FY2028. But thresholds could change in upcoming negotiations.
The Council of the EU added a revenue threshold of €450M, and the European Parliament’s lead rapporteur proposed going even further: 3,000 employees + €450M net revenue.
A final decision will follow plenary votes and trilogues later this year.
A study by Copenhagen Business School and University College Dublin estimates that:
-
Many high-impact sectors (e.g. agriculture, real estate) could see >90% reduction in CSRD coverage
-
Health and social services sectors may retain ~40% of in-scope firms
-
Employee-based thresholds risk excluding financially impactful firms with smaller headcounts
Stay tuned: we’ll keep tracking the moving pieces of the CSRD puzzle.
