ESMA’s Enforcement Priorities for 2025

ESMA has released its priorities for the following year, including a section on sustainability reporting practices. In essence, despite the legal fog created by the Omnibus package, companies should continue to report under the rules that currently apply and treat any simplifications still in the legislative pipeline as just that: proposals.

ESMA’s 2025 Priorities on the CSRD

In particular, the revised CSRD datapoints (“ESRS”) will only bite once their Delegated Act is published in the Official Journal, so companies under “Wave 1” should not base their 2026 reports on EFRAG’s drafts or technical advice that have not been formally adopted yet.

ESMA also tells “Wave 1” companies to keep an eye on the Commission’s so-called “Quick Fix”, which is still under scrutiny. The Commission’s aim is to extend and clarify certain phase-ins for entities still in scope, easing the immediate burden for the next couple of periods, but because final approval is pending, ESMA’s practical advice is to plan on the reliefs while monitoring the legislative finish line carefully.

With regard to “Wave 2” companies, these should watch how their own Member State transposes the “Stop the clock” Directive to understand their first-year obligations.

Unsure what “Wave” you company falls under? Check this article.

ESMA’s 2025 Priorities on the EU Taxonomy

For EU Taxonomy disclosures, ESMA notes that the Commission adopted a Delegated Act in July 2025 amending the existing Delegated Acts. If the European Parliament and the Council raise no objection during the scrutiny period, this will enter into force for the 2026 reports.

Companies are encouraged to apply the revised Taxonomy rules but may opt to use the current rules for 2026. ESMA therefore accepts different levels of compliance, recognising that the ground is still shifting.

Recommendations from ESMA for Sustainability Reporting in 2026

Reading between the lines of the enforcement priorities, ESMA’s real focus is on the quality of materiality work and the usability of reports. It has seen too many descriptions that restate definitions rather than explain how each issuer actually judged what is material. ESMA wants issuers to make the “engine room” of double materiality visible:

• The inputs used: data sources, geographies and activities covered, key assumptions;
• The thresholds applied, including severity scales for negative impacts and the indicators; and where helpful,
• The numbers used for risk thresholds, plus evidence that gross impacts were considered before mitigation.

In addition, when describing stakeholder engagement, the affected stakeholders should be identifiable and reports should show how their views informed the outcome. 

Finally, ESMA asks for statements that are easy to navigate and properly scoped:

• Lay out material IROs, connect them to strategy and the business model
• Point clearly to where policies, actions, targets and metrics live in the topical standards (including any entity-specific items), ideally using ESRS terminology and mapping to topics and sub-topics for comparability.
• Keep the sustainability statement on the same consolidation perimeter as the financials.
• Be transparent about any value-chain scope limits and any changes to target scopes or baselines.
• Use cross-references and disclosure codes (e.g.,“E2-5”, “S1-5”) to improve readability, without scattering the story so much that users lose the thread.
• And if you include permitted non-material information, label it as such so it doesn’t obscure what actually matters. 

In short, keep reporting under the current framework while the Omnibus, the “Quick Fix” and the Taxonomy amendments become clear, but put most of your effort into making your double-materiality process specific, transparent and navigable. That is the through-line in what ESMA expects this year.