{"id":1929,"date":"2026-05-06T14:10:56","date_gmt":"2026-05-06T13:10:56","guid":{"rendered":"https:\/\/blog.kleinwolfpeters.com\/?p=1929"},"modified":"2026-05-06T14:10:56","modified_gmt":"2026-05-06T13:10:56","slug":"sensible-sustainability","status":"publish","type":"post","link":"https:\/\/blog.kleinwolfpeters.com\/?p=1929&lang=en","title":{"rendered":"Sensible sustainability"},"content":{"rendered":"

About two years ago, my colleague Richard Peters wrote about the EU\u2019s new rules for sustainability reporting (see Sense and sustainability<\/a>, August 2024). How have companies been handling the new standards, and what\u2019s changed in the meantime?<\/p>\n

 <\/p>\n

Two years on: How companies are handling ESRS<\/strong><\/p>\n

One of the things I like best about living in Europe is its strong green streak. By that I mean environmental consciousness\u2014extensive recycling programs, emphasis on accessible public transit, and the like. And this consciousness isn\u2019t limited to private citizens or nonprofit organizations, either. The Continent\u2019s richly varied business landscape features many companies who are keenly aware that their business operations\u2014purchasing supplies, manufacturing products, providing services, using infrastructure, etc.\u2014have an impact on the environment, both locally and globally. In a bid for environmental protection and transparency, they want ways of quantifying, measuring, and reporting that impact.<\/p>\n

Cue the EU legislative machinery: It\u2019s for precisely those reasons that lawmakers drew up a framework, the Corporate Sustainability Reporting Directive (CSRD<\/a>), which entered into force two years ago. To comply with that law, companies whose business within the EU meets certain size and scale thresholds have to apply the European Sustainability Reporting Standards (ESRS<\/a>).<\/p>\n

Last year was the first time companies had to publish ESRS-compliant reports, providing data on 2024. I fully expected to read that businesses were chafing under this new layer of bureaucracy and administrative burden. To my surprise, surveys reveal that their experiences have been mixed. True, implementing ESRS has been more demanding than initially anticipated. It involves various business functions, gathering reliable data from along the whole value chain (which for many companies stretches across multiple countries), and an unfathomable number of data points.<\/p>\n

But I\u2019m pleased to see that businesses have acknowledged upsides, too. Companies are doing the double materiality assessment and identifying impacts, risks, and opportunities because this is required under CSRD, but they\u2019re also finding that these exercises yield some of the most valuable outputs for internal decision-making and strategy. This internal focus carries over to stakeholder engagement, which is mostly limited to in-house voices and immediate financial audiences, with relatively little outreach to wider societal stakeholders. However, surveys in 2025 indicate that one of the things companies are planning to use their CSRD data for is to respond to growing investor and regulator interest.<\/p>\n

\u00a0<\/strong><\/p>\n

Easing the administrative burden<\/strong><\/p>\n

I think it\u2019s natural for there to be some growing pains; after all, ideas rarely go like clockwork when they\u2019re first implemented. And indeed, there was enough pushback about the reporting burden that EFRAG and the European Commission proposed\u2014and, by late 2025, technically agreed on\u2014some considerable simplifications to ESRS. The streamlined set of standards, which will apply from the 2026 reporting cycle onward, reduces mandatory data points by well over half and removes all voluntary ones.<\/p>\n

As a quick aside, I have to say I\u2019m impressed by the democratic spirit of cooperation this demonstrates. A representative government enacted legislation, it was rolled out, issues and problems were raised, feedback was heard, and action was taken to find some middle ground. It might be slow, it\u2019s often messy, but it\u2019s a great process when it works.<\/p>\n

\u00a0<\/strong><\/p>\n

What\u2019s next<\/strong><\/p>\n

At any rate, momentum is clearly toward fewer data points and closer alignment with global standards such as International Financial Reporting Standards (IFRS) S1 and S2<\/a>. There\u2019s also a push for a stronger focus on drawing up sustainability statements that fairly represent a company\u2019s specific situation rather than regurgitating exhaustive checklists.<\/p>\n

For reporting teams\u2014and for language service providers like Klein Wolf Peters who support them\u2014this means that high\u2011quality narrative, a comprehensible explanation of methods and assumptions, and consistent terminology in every language version are becoming at least as important as the underlying quantitative disclosures. To be a responsible player in their industry and the global economy, companies need their stakeholders around the world to understand what they\u2019re doing and why; the key to that is clear and trustworthy communication.<\/p>\n","protected":false},"excerpt":{"rendered":"

Two years ago, sustainability reporting became mandatory for thousands of companies across the EU and beyond. Reaction to the first reporting cycles has been mixed.<\/p>\n","protected":false},"author":8,"featured_media":1926,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[2],"tags":[763,762,738,739],"_links":{"self":[{"href":"https:\/\/blog.kleinwolfpeters.com\/index.php?rest_route=\/wp\/v2\/posts\/1929"}],"collection":[{"href":"https:\/\/blog.kleinwolfpeters.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/blog.kleinwolfpeters.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/blog.kleinwolfpeters.com\/index.php?rest_route=\/wp\/v2\/users\/8"}],"replies":[{"embeddable":true,"href":"https:\/\/blog.kleinwolfpeters.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=1929"}],"version-history":[{"count":1,"href":"https:\/\/blog.kleinwolfpeters.com\/index.php?rest_route=\/wp\/v2\/posts\/1929\/revisions"}],"predecessor-version":[{"id":1930,"href":"https:\/\/blog.kleinwolfpeters.com\/index.php?rest_route=\/wp\/v2\/posts\/1929\/revisions\/1930"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/blog.kleinwolfpeters.com\/index.php?rest_route=\/wp\/v2\/media\/1926"}],"wp:attachment":[{"href":"https:\/\/blog.kleinwolfpeters.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=1929"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/blog.kleinwolfpeters.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=1929"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/blog.kleinwolfpeters.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=1929"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}