Sustainability reporting: EFRAG delivers a maximum ESRS data point reduction proposal that must be amended to serve as a compromise

Reclaim Finance analyzes EFRAG's proposal to reduce ESRS data points by 68%, warning that this limits comparability and data quality. The organization specifically criticizes proposed 'reliefs'—such as the 'undue cost or effort' filter—that could allow companies to avoid reporting material information. Additionally, the document argues that the standards fail to adequately address the financial sector, calling for more precise reporting on fossil fuel financing and the use of physical intensity targets rather than attribution-based metrics like PCAF.

• EFRAG's proposal significantly reduces the volume of required sustainability data, cutting mandatory datapoints by 57% and the full set of disclosures by 68%, while removing all voluntary data points. This reduction is expected to limit comparability and data quality due to lower granularity and less guidance for companies.
• The proposal introduces 'reliefs' that Reclaim Finance argues could undermine reporting integrity. Specifically, the 'undue cost or effort' relief allows companies to skip material information based on reporting burden, and a relief regarding 'operational control' could lead to the exclusion of data from joint operations.
• Reclaim Finance identifies gaps in the reporting of transition plans and the assessment of negative impacts. It argues that the current data points for transition plans are insufficient to prevent greenwashing and suggests that all potential negative impacts reaching a certain scale should be considered material, regardless of likelihood, extending the precautionary approach currently used for human rights.
• The proposed standards are deemed inadequate for financial institutions, particularly regarding decarbonization targets and fossil fuel support. Reclaim Finance argues that PCAF-based methodologies are flawed due to attribution factors and recommends that financial institutions instead report on sectoral physical intensity targets (WAPI) and disaggregated financial services provided to fossil fuels.

APA

Manickawasagar, A. (2025). Sustainability reporting: EFRAG delivers a maximum ESRS data point reduction proposal that must be amended to serve as a compromise. Reclaim Finance. https://reclaimfinance.org/site/en/2025/08/18/sustainability-reporting-efrag-delivers-a-maximum-esrs-data-point-reduction-proposal-that-must-be-amended-to-serve-as-a-compromise/

Chicago

Manickawasagar, Aatiraï. Sustainability reporting: EFRAG delivers a maximum ESRS data point reduction proposal that must be amended to serve as a compromise. Reclaim Finance, 2025. https://reclaimfinance.org/site/en/2025/08/18/sustainability-reporting-efrag-delivers-a-maximum-esrs-data-point-reduction-proposal-that-must-be-amended-to-serve-as-a-compromise/.

Wikipedia

{{cite press release |last1=Manickawasagar |first1=Aatiraï |title=Sustainability reporting: EFRAG delivers a maximum ESRS data point reduction proposal that must be amended to serve as a compromise |publisher=Reclaim Finance |date=18 August 2025 |url=https://reclaimfinance.org/site/en/2025/08/18/sustainability-reporting-efrag-delivers-a-maximum-esrs-data-point-reduction-proposal-that-must-be-amended-to-serve-as-a-compromise/ |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@misc{manickawasagar2025sustainability, author = {Manickawasagar, Aatiraï}, title = {{Sustainability reporting: EFRAG delivers a maximum ESRS data point reduction proposal that must be amended to serve as a compromise}}, publisher = {Reclaim Finance}, year = {2025}, month = aug, url = {https://reclaimfinance.org/site/en/2025/08/18/sustainability-reporting-efrag-delivers-a-maximum-esrs-data-point-reduction-proposal-that-must-be-amended-to-serve-as-a-compromise/}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }