Regulatory status checked: 10 August 2026.
The European Sustainability Reporting Standards are increasing the availability of company-reported sustainability information. This can give investors more direct access to information about environmental, social and governance matters. It does not, however, make external analysis or ESG ratings automatically redundant.
The first companies subject to the Corporate Sustainability Reporting Directive reported for the 2024 financial year. The EU subsequently narrowed the future scope of mandatory reporting through Directive (EU) 2026/470. The revised thresholds generally cover undertakings that exceed both 1,000 employees and EUR 450 million in net annual turnover, subject to the detailed provisions and transitional arrangements in the legislation.
On 3 July 2026, the European Commission also adopted simplified ESRS. The adopted text reduces the number of datapoints, gives greater priority to quantitative information, clarifies the application of materiality and distinguishes more clearly between mandatory and voluntary disclosures.
Any discussion of the number of ESRS datapoints must therefore identify the applicable version of the standards. A single historic number no longer provides a reliable description of the evolving framework.
ESRS reporting can improve access to structured sustainability information, including information about both a company’s impacts and the financial effects of sustainability matters. The resulting disclosures should not be described as automatically complete or “true” raw data.
Reported information remains influenced by materiality assessments, organisational and value-chain boundaries, methodologies, estimates, data availability and assurance. Definitions and reporting scopes under ESRS and the Sustainable Finance Disclosure Regulation are also related but not identical.
More company-reported information may reduce reliance on ratings for some analytical tasks. Investors may be able to work directly with disclosed metrics when the data is sufficiently comparable and relevant. Ratings can nevertheless continue to provide interpretation, aggregation and a defined analytical methodology.
Regulation (EU) 2024/3005 on ESG-rating activities has applied since 2 July 2026. It introduces requirements concerning authorisation, transparency, governance, conflicts of interest and the integrity of ESG-rating activities in the EU.
The likely outcome is therefore a change in how ratings are produced and used—not the automatic disappearance of ESG ratings. The balance between reported data and external assessment will depend on the investor’s purpose, the quality and coverage of available disclosures, and the transparency of the rating methodology.
Regulatory status checked: 10 August 2026. Regulation (EU) 2025/2075 requires in-scope transactions in transferable securities executed on EU trading venues
