Position and Statement
Positioning on the revised European Sustainability Reporting Standards (ESRS) in the context of the Omnibus I simplification package (Feedback on the revised ESRS)
Federation of German Industries e.V.
Date: 03 06 2026
Summary
The BDI acknowledges the Commission’s draft Delegated Act published on 8 May 2026 amending Delegated Regulation (EU) 2023/2772 as regards the simplification of certain European Sustainability Reporting Standards (ESRS). We recognize and appreciate the Commission’s efforts to introduce targeted improvements to EFRAG’s original work with the objective of alleviating reporting burdens on companies. At a time when European businesses are facing increasing competitive pressures and economic uncertainty, it is essential that corporate resources can be directed towards innovation and investment rather than disproportionate compliance requirements.
Some of the improvements of the revised ESRS are highly appreciated. The text now clarifies that undertakings are not expected to meet the specific information needs of each individual user and emphasizes that the objective of the standards is to ensure the reporting of decision-useful information for users. We also particularly welcome the Commission’s proposal to delete the datapoint on secondary microplastics as well as the absence of any time limitation on the use of the reliefs, and the additional amendments introduced to simplify the application of the standards for preparers. This constitutes a positive and pragmatic step towards a more proportionate sustainability reporting framework.
However, the BDI remains concerned that the proposed amendments do not yet go far enough to meaningfully reduce the complexity and administrative burden associated with the ESRS framework in Europe. Despite the announced reduction in data points by around 60 percent, companies are currently seeing a reduction in administrative burden of only 10-20 percent. EFRAG’s reported reduction of datapoints is also based on merging several data-points into one datapoint with respective subdatapoints and the elimination of duplicates, which does not reflect genuine simplification and does not reduce costs.
In addition, the draft ESRS include some data points and principles that will result in significant legal uncertainty for companies. The consequences of that will be even greater than the administrative burden, hence these risks must be minimized as much as possible.
▪ Especially under the current fair presentation principle it is nearly impossible for companies to legally comply with their reporting obligations. A fair presentation framework in a double materiality context can create broad corporate expectations and increase reporting effort, potentially generating tension between compliance and the provision of decision-useful information.
▪ In terms of the concept of “informed assessment”, which continues to apply, without clear boundaries, undertakings and their auditors will struggle to determine if their reports meet the information needs of all potential users.
▪ Moreover, the disclosure requirements regarding anticipated financial effects lead to a lack of legal certainty for companies since they are highly speculative, difficult to audit, commercially sensitive and won't be comparable to other companies.
▪ Unclear definitions e.g., ESRS S5 paragraph 13 definition of ‘key materials’ and setting a threshold or ESRS E2 paragraph 18 and 19 and AR 5 definition of ‘total number of Substances of High and Very High Concern’ leads to legal uncertainty when reporting.
▪ The level of granularity demanded, e.g. when assessing impacts, risks and opportunities and subsequently reporting at site/ location level or even “water basin” level, remains disproportionate, nonmeaningful and impractical for many companies.
▪ Gender pay gap/ Renumeration metrics: Reporting on salary range from lowest paid individual to highest paid individual is based on sensitive information, putting burden on data collection and auditing process. At the same time, the disclosure is not very meaningful.
Also the introduction of new requirements contradicts the objective of the ESRS revision, which is to simplify and improve implementability (e.g. REACH-List/ or Human rights incidents/ ESRS S1-S4). Besides, the introduction of sector-specific reporting requirements in ESRS E2 for certain companies contradicts the principles of the agnostic ESRS. Accordingly, all newly introduced reporting requirements vs. ESRS Set 1 should be withdrawn. Finally, the reporting burden for global companies can be simplified and reduced if the ESRS are accepted as being sufficient for complying with IFRS requirements.
Overall, in its current form, the revised draft risks replacing existing obligations with new complexities and heightened compliance risks rather than providing relief. What is urgently needed are genuine simplifications and pragmatic, real-world solutions. The text must be self-explanatory without the need for supporting documents. Moreover, companies should be allowed to choose to apply the previous or the new ESRS for a transitional period which would lead to more flexibility and release burden on the companies.
Otherwise, the expected relief for businesses would fall far short of political expectations and the requirements of the EU as a competitive business location. Significant reporting obligations remain in place, many of which continue to impose substantial operational and resource constraints on companies without necessarily enhancing the quality, comparability or usefulness of sustainability information for users
For this reason, in the following we are describing once again our key priorities and other important recommendations aimed at ensuring that the European sustainability reporting framework becomes more proportionate, competitive and decision useful. We strongly encourage the Commission to continue pursuing an ambitious simplification agenda on this matter and to take further decisive action to address the remaining concerns, which continue to represent a significant risk of significant legal uncertainty for reporting companies.
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Internet www.bdi.eu
E-Mail j.winkler@bdi.eu
Under the current Fair Presentation principle, it is nearly impossible for companies to legally comply with their reporting obligations.
Additionally, the concept of “informed assessments” has been clarified and not yet been deleted.
Limit the concept to primary users with particular reference to investors, also with a view to greater alignment with the ISSB.
Modify 3.1.1. Information materiality: 'Information is material when omitting, misstating or obscuring that information could reasonably be expected to materially influence.'
Add after b) 'When considering the decision-usefulness of information the undertaking is not required to aim to meet all the specific information needs of each individual user but to consider the sustainability statement as a whole.'
Delete “informed assessments” to get a legally compliant and auditable system.
Afair presentation-framework in a double materiality context can create broad corporate expectations and increase reporting effort, potentially generating tension between compliance and the provision of decision-useful information.
There must be established a legally compliant and auditable system in accordance with the principle of fair presentation.
The mandatory disclosure of quantitative and qualitative information on Anticipated Financial Effects (AFE) remains unchanged
ESRS E1 requires disclosure of AFE of climate-related risks and opportunities across short-, medium-, and long-term horizons, creating an expectation that undertakings could model future impacts with a reasonable degree of confidence.
Align climate-related disclosure requirements with those of the ISSB, i.e., eliminating all the current specific disclosure requirements presented in E1 for climate (e.g., E1-11, paragraphs 39 to 41) and making sure there is better ability for undertakings to aggregate/ disaggregate information, following the ISSB logic.
Clarify that whereAFE depend primarily on external actors, public infrastructure,
The requirement to reportAFE remains difficult to audit, highly speculative and commercially sensitive as there is no accepted and generally used method.
These changes could improve reliability/credibility of information and reduce the risk of misinterpretation by stakeholders.
Data collection and reporting onAFE of transition and physical risks (E1-11) requires scenario modelling and assumptions not embedded in standard
3 ESRS S1-S4 Human Rights incidents
regulatory developments, or third-party investment decisions, undertakings may rely on qualitative disclosure, scenario description and aggregation, and are not expected to produce detailed or deterministic long-term financial estimates.
Extend and harmonize phase-in provisions for all disclosures related toAFE with no sunset clause until more robust methodologies are available.
We agree and welcome the clarification made inAR 17 that a revision ofAFE estimates not necessarily imply a reporting error. However, we see the need for clarification as AR 17 requires the undertaking to “revise its estimates in the next appropriate sustainability statement”. It is unclear to us whether this requires a restatement ofAFE estimates or is just a change in estimates as in financial reporting. In case it would require a restatement, we disagree with this approach and urge to delete thisAR, if it is just a change in estimates, we welcome a clarification.
New application requirement for Human Rights incidents. It covers ‘substantiated’cases, which may be defined in different ways in this context. Limit the concept to reporting only on confirmed severe human rights incidents by adding a “confirmed” and a “severe” before “human rights incidents” to ensure consistency between the ESRS and the SFDR.
financial reporting. Disclosure on this topic is forward-looking and judgment-heavy and should be deleted.
As serious assumptions are partly not available for sustainability impacts, the value-add of company's anticipations are questionable and the usefulness for data users is strictly limited.
E1-11 does not constitute a simplification for anticipated financial effects as, for example, it still refers to “monetary amount and percentage of assets”, “monetary amount and percentage of revenue”. Monetary amounts and percentage of assets remain and also here breakdown for short- medium and long term was AND disclosure on asset level is an increased reporting burden.
Substantiation is a subjective judgement which will create a) high reporting burden, b) endless discussions in the assurance process and c) countless different views of stakeholder groups.
Only confirmed and severe incidents should be subject to reporting, to prevent unnecessary reporting
4 ESRS S1
Adequate Wages (para. 28 & amended AR20)
The revised S1-9 requires companies to confirm that wages meet countryspecific benchmarks. For non-EU countries, wage adequacy must be assessed against a “decent standard of living,” using ILO living wage estimation principles or estimates issued by publicly mandated authorities (per amended AR20, para. 73).
Keep the initial ESRS requirements as defined in Delegated Regulation (EU) 2023/2772.
Develop, as soon as possible, a free reference/database to ease the burden on companies, allowing them to calculate the metric more easily, and limit this metric to the most relevant countries. Until such a database is available, the metric should remain voluntary.
Delete the requirement to take into account the ILO principles on estimating a living wage.
and the need for making corrections from one fiscal year to the next.
Regarding the disclosure of incidents related to discrimination and human rights, we believe it would be helpful to clearly define the concept of “substantiated incidents” that was introduced in the revised ESRS. Adetailed guidance and practical examples would support a consistent and shared understanding and prevent interpretation gaps.
This is a new requirement, which leads to enormous additional compliance effort challenging local legislation. The concept referenced here comes from due diligence. It is not applicable for company reporting.Also the referenced methods are not the only viable option.
Complexity of metrics required to report on adequate wages, especially because of the linkages with the ILO principles.
Companies operating in multiple countries face particular challenges in applying this metric consistently across diverse roles and wage standards. In practice, this could force multinationals to verify large numbers of non-EU wages against individual living wage benchmarks and to research/validate mandated estimates where no statutory or collectively agreed minimum exists. This creates significant ongoing administrative burden without necessarily improving comparability or assurance.
5 ESRS 1 „ISSB Adoption Status“
Allowing the ISSB to officially recognize the ESRS as being sufficient for complying with IFRS requirements
E.g., insert two clarifications into the ESRS DelegatedAct without changing the established European ruleset:
The reporting burden for global companies can be simplified and reduced if the ESRS are accepted as being sufficient for complying with IFRS requirements. This is a unique strategic window to
ESRS E1, E5, S1-S4 Additional datapoints added
We urge the European Commission, EFRAG, and the ISSB to find solutions together to achieve this objective in course of finalizing the ESRS Delegated Act.
(1) Greater flexibility in the reporting structure by deleting strict structural requirements and
(2) Clarification of the existing nonobscuring principle by stating that financially material information must not obscure information that is material from an impact perspective and vice versa.
reduce duplicative reporting systems, compliance, audit and data-management costs, and improve global comparability.
To remain consistent and compatible with the architecture of the European double materiality framework, the clarification to the non-obscuring principle must apply universally and symmetrically, addressing both financial and impact materiality to avoid any implicit hierarchy between the two.
Additional datapoints and disclosure requirements were introduced.
Additionally, three data points have been made mandatory that were previously voluntary.
All new data points and disclosures should be deleted to avoid additional burden for preparers [e.g., deviation from 1.5°C pathway (ESRS E1.AR2), achieved and expected GHG emission reductions (ESRS E1-5.22b), reporting on GHG emissions from purchased cloud computing and data centre services (ESRS E1.AR24 (g)), emissions of pollutants – managerial assessment (ESRS E2.AR2), resource inflows (ESRS E5.4-13a) or 13c), resource outflows (ESRS E5.5-15c) or ESRS S2-S4].
Delete data points, which have been made mandatory and were previously voluntary (i.e., ESRS E3 Para. 16c, ESRS E3 Para. 16d and ESRS E4 Para.11).
Additional datapoints increase the burden for preparers instead of simplifying the ESRS requirements.
Simplification of the ESRS Set 1 and reducing reporting burden is necessary, as intended by the omnibus initiative.
ESRS 1
Mapping IROs to DRs
ESRS 1
Sub-sub-topic integration
Concept or guidance for mapping IROs/sub-topics to disclosure requirements still missing.
Sub-sub-topic integration into subtopic level not clear thereby jeopardizing the simplification.
Provide concept/guidance for mapping IROs/sub-topics (ST) to disclosure requirements in the delegated act.
Explanation in ESRS 1AppendixAhow to deal with sub-sub-topic for preparers that evaluate the double materiality on sub-subtopic level and not on sub-topic level. It
Improve clarity and comparability of disclosures. Reduce coordination effort with auditors.
Lack of clarification might lead to massive overreporting if the auditors require the preparers to disclose on each sub-sub-topic in parentheses (even if
into sub-topic level
ESRS 1
“Net approach”
ESRS 1
Disaggregation & Geography
(32 (b), AR 16 53, AR 34)
The “net approach” for IRO evaluation complicated and not practical.
Measures to mitigate the (actual and potential) impacts of the current year cannot be taken into account in the evaluation. This is not consistent with financial reporting (e.g. provision measurement at year end closing).
Impacts that are highly decision-useful for users require currently an additional evaluation under DMAeven if they are not material under the net approach (“valuation impact factor”), which is not practical.
ESRS 1 requires geographic disaggregation where material differences exist but does not define clear criteria for the appropriate level of granularity. This puts an unbalanced focus on the geographical dimensions of impacts and “the specific context of the geography” for the double materiality assessment, which goes far beyond set 1 ESRS requirements.
should be clarified that preparers do not need to provide disclosures on other subsub-topics when only one single sub-subtopic in parentheses is material.
only one sub-sub-topic is material based on the DMA).
Extend the time period for mitigation measures to be accounted for to current reporting period. This requires removing the last sentence from ESRS 1 Par. 44a).
Delete the additional evaluation of impacts that are highly decision-useful for users (ESRS 1 Par. 44c).
Better aligning sustainability and financial reporting.
Delete contradicting requirements undermining the value of the DMA. Minimizing discretion regarding the evaluation of impacts.
We clearly suggest acknowledging companies’net approach to potential impacts. This will be more reflective of companies’real sustainability performance and prevent overstatement of materiality.
ESRS 1 para. 33 andAR 15 for paragraph 33 as well as ESRS 1 para. 53, AR 34 for paragraph 53 and ESRS 1.56 should be removed in their entirety.
Adding geographies to the double materiality analysis requires undertakings to conduct the materiality assessment at the level of its subsidiaries, which contradicts to the option of a top-down assessment for the double materiality assessment (ESRS 1.27).
Disaggregation of all impacts, risks and opportunities leads to exponential granularity and information overload.
ESRS 1
Disaggregation & IROs (para. 55)
In addition, this creates uncertainty, increases audit risk, and may lead to inconsistent application across undertakings. We recommend providing additional guidance on when countrylevel disclosure is expected, including indicative criteria and practical examples, to improve consistency, comparability, and auditability.
Para. 55 requires disaggregated reporting when there are significant differences between material impacts, risks or opportunities at group level and those of individual subsidiaries.
The focus should remain on consolidated reporting; therefore, the previous wording ‘adequate description of IROs’should be retained or (103) should be deleted. Although (103) suggests that this provision already existed in ESRS Set 1, it has been significantly amended. For undertakings with activities in various countries, there will always be “significant variations” at the most granular level – i.e., location or asset level. No single asset or single location will always have the exact same impacts, risks, and opportunities as other assets or locations.
Disaggregating could lead to auditors and selected stakeholders expecting reporting on subsidiary level, which is not foreseen (see ESRS 1 56 (101)) and would overburden preparers.
ESRS 1
Impact materiality assessment
(para. 43 (c) and AR 28 for para. 43(c))
This introduces a new principle concerning ‘prevention, mitigation and remediation policies and actions in the materiality assessment’ and their connection to impacts.
Deletion of para. 43 (c) andAR 28 for para. 43(c)
ESRS 1
Benefit schemes / The paragraphs 72 and 73 in ESRS 1 (section 5.3), in combination with the application requirements (AR) under E1-
Removal of paragraph 72 and 73 and last sentence in letter (a) of AR 20 for paras. 29 and 30 in ESRS E1 (Emissions
This new principle could cast doubt on operating permits or product approvals and should therefore be deleted.
It remains unclear how to practically implement this paragraph in the DMAprocess as every information could potentially be decision-useful to users risking lengthy discussions with auditors and extensive documentation efforts.
The wording suggests that assets held in benefit schemes (e.g. pension funds) must always be reflected as Scope 3 emissions, irrespective of
reporting boundary / Scope 3 (para. 72 & 73)
8, are unclear and are likely to trigger interpretation debates with auditors. In particular, it remains unclear how the identification of impacts/ risks/ opportunities (IROs) arising from assets held by the undertaking’s long-term employee benefit schemes relates to the reporting boundary for GHG emissions (especially Scope 3).
reporting), i.e. “In all cases, the requirements of ESRS take precedence over the above-mentioned GHG accounting standards (e.g. regarding reporting boundaries).”
materiality. This is not aligned with the logic of the GHG Protocol, which does not explicitly require accounting for emissions from pension fund assets in all cases (materiality dependent).
In practice, such assets may already be captured in Scope 1 and 2 (e.g. leased buildings).Additional inclusion in Scope 3 based on para. 72 and E1-8 may therefore lead to double counting.
The term “benefit schemes” is not further defined, creating additional uncertainty regarding scope.
ESRS 1
Transitional provisions / inconsistent timelines (para. 125 (b) & (c))
While the gradual introduction of more complex requirements is welcome, the newly introduced transitional provisions for Wave 1 companies are not aligned with the phase-ins defined in the Quick Fix DelegatedAct adopted by the European Commission in July 2025.
Especially the carve-out for ESRS E1-11 para. 38(a)(b) and 39(a)(b) could even imply earlier quantitative reporting than under the initial ESRS (Delegated Regulation (EU) 2023/2772) (see above).
ESRS 1
Value Chain
(Paras. 62-66)
There are some needs for clarification in terms of the value chain.
Include ESRS E1-11.38a/b and 39a/b in general phase-ins forAFE by deleting “with the exception of ESRS E1-11 paragraph 38(a)(b) and 39 (a)(b)” in both 10.3 (b) and (c).
Introducing a new timeline for mandatory disclosures creates planning uncertainty for companies and runs counter to the Commission’s simplification objective.
We recommend clarifying that in ESRS 1 paragraph 62-66 value chain information is limited to information that is reasonably obtainable and proportionate to the undertaking’s level of influence, in order to ensure practical applicability and auditability.
In addition, the reference to “direct and indirect business relationships” should be narrowed to cases where a clear and
ESRS 2
“Current financial effects”: asymmetry and internal inconsistencies (ESRS 2 (para. 25)
Users of external reporting are generally interested in how materialized risks and opportunities have affected financial statements during the reporting period. This interest should apply to all material risks and opportunities, not only to the subset of ESG-related risks and opportunities. The current approach therefore creates an asymmetric and incomplete disclosure.
demonstrable link to material impacts, risks or opportunities exists, to avoid open-ended reporting obligations.
Finally, the requirements should be explicitly aligned with paragraphs 93–95, ensuring that value chain disclosures are constrained by the principle of information available without undue cost or effort.
Eliminate the ESRS disclosure requirement for “current financial effects” of ESG-related risks and opportunities. If relevant, disclosure on current financial effects should be addressed consistently within general financial/risk reporting for all material risks and opportunities.
Further inconsistencies within ESRS 2:
▪ Para. 46 introduces an additional disclosure on significant CapEx/OpEx allocated to an action to manage a specific risk or opportunity.
▪ It is unclear whether “current financial effects” are expected before or after such actions (double counting risk vs. practicability).
▪ CapEx/OpEx must be “significant”, while no significance threshold is set for current financial effects (inconsistent threshold logic).
▪ WhileAR19 suggests that the linkage between financial effects and significant CapEx/OpEx may be considered, it remains unclear what disclosure is expected in practice.
ESRS 2
Risk management
GOV-4 DR 17&18
Wording in GOV-4 still refers to risk management and internal control processes and systems in relation to sustainability reporting.
Addition necessary: If sustainability risk assessment is fully integrated in group wide risk management, disclosure can be excluded under GOV-4, if main features and components are already described in financial statement.
We also support reduction of scope of GOV-4 to ICS processes for only
ESRS 1
Updating disclosures about events after the end of the reporting period
The provision stating that disclosures need only be updated “where appropriate” has been removed.As a result, disclosures must now be updated in all cases.
quantitative disclosures for sustainability reporting. GOV-4 is still demanding the main features and components of its risk management and ICS. GOV-4 does not refer to IRO management.
Addition of “where appropriate” in ESRS 1 7.5:
If, after the reporting period but before the management report is authorised for issue, the undertaking receives information providing evidence or insights about conditions that existed at the end of the reporting period, the undertaking shall, where appropriate, update its disclosures in light of the new information.
The removal of the phrase ‘where appropriate’ represents a deterioration compared to the current updating requirement in the ESRS. In fact, this example is just one of many in the draft where the removal of single words results in a stricter version of the current reporting requirements.
ESRS E1
Anticipated financial effects from material physical and transition risks and potential climate-related opportunities (E1-11)
ESRS E1
–Quantifying both physical and transition climate risks with monetary amounts at the level of detail pro-posed in the draft is not only burdensome but also giving the illusion of preciseness. The associated measurement uncertainty requires a great deal of explanation and is not sufficiently meaningful (see above).
In line with the removal of anticipated financial effects in the other E-standards, we propose that this disclosure requirement be removed.
GHG emission reduction (para. 22 (b)) While a breakdown of Scope 1 & 2 GHG emission reduction by decarbonization lever is a reasonable request, a breakdown of achieved Scope 3 GHG emission reduction by decarbonization lever is simply not possible.
ESRS E1 21 (b) should be made specific only for those GHG emissions which a company controls and for which the GHG accounting is more mature (which is Scope 1 and Scope 2 GHG emissions).
The accounting of Scope 3 GHG emissions is by far not yet advanced to capture actual emission reductions by decarbonization lever.As Scope 3 emissions often include estimates, a further breakdown would also increase the level of complexity and estimates both in reporting and auditor's actions. This does neither support stakeholders´ interests nor the approach to reduce the already high complexity of ESRS reporting standards.
ESRS E1
Climate
Targets and Transition Plans
ESRS E1
Scope 3
Emissions and Operational Control
While ESRS states that it does not mandate strategy, the structure of ESRS E1 creates an implicit expectation that undertakings should adopt climate targets and transition plans over time.
Emissions arising from customer use are treated as Scope 3 emissions attributable to the undertaking, with an implicit expectation that they are operationally manageable and appropriate for targets or transition planning.
Clarify that the decision not to set climate targets or adopt a transition plan can represent a stable, long-term reporting outcome, and should not require justification, future intent, or implied progression.
Clarify that Scope 3 emissions should not trigger expectations around targets, transition plans, or implied future commitments unless the undertaking has meaningful operational control or leverage.
Moreover, completeness of Scope 1, 2 and 3 inventory leads to disproportionate effort in data collection. Exclusions in the inventory should be allowed in alignment with GHG Protocol (i.e. exclusions <5% to be allowed).
For some undertakings, the absence of climate targets or transition plans is a deliberate, long-term outcome of a materiality assessment and business strategy, not an interim state or reporting gap.
ESRS E1
Targets related to climate change (E1-6)
Requiring companies to state whether their GHG emission reduction targets are “science-based and compatible with limiting global warming to 1.5°C” would, in practice, often require external validation, such as through SBTi. This would create significant administrative burden, costs and methodological complexity.
Targets aligned with the EU’s climate and energy policy objectives should be considered science-based.
In many business models, use-phase emissions are not under the undertaking’s operational control. While companies may influence product or asset availability, actual usage patterns are determined by customer demand and decision-making.
The ‘operational control’approach should be avoided, as it conflicts with financial reporting and could lead to difficulties for data users in interpreting the reports.
ESRS E1
Gross scope 1, 2, 3 GHG emissions (E18)
ESRS E1
Companies should not be required to determine and report immaterial quantities of GHG emissions where the effort is disproportionate to the relevance of the information.
The ESRS does not explicitly require greenhouse gas emissions to be presented
Apractical de minimis threshold would improve proportionality and legal certainty.
The additional disclosure requirements on frameworks, methodologies, decarbonisation pathways, scenarios and critical assumptions are also extensive and difficult to provide in a robust and comparable manner. Furthermore,AR 17 remains unclear as regards the proposed “benchmarking” against a refer-ence target value, which could lead to inconsistent application and legal uncertainty.
In practice, companies may otherwise have to collect data on very small amounts of CO₂, N₂O or other gases used, for example, as test gases. This creates unnecessary administrative burden and audit discussions without adding meaningful value for users of sustainability information.
We recommend removing the “direct biogenic scope 1 emissions” row from the
However, a fragmented presentation (e.g. separate tables for Scope 1–3 and biogenic emissions)
Emissions Disaggregation (E1-8 AR 26 for Paras. 29 and 30)
in a single table. The relevant guidance uses non mandatory wording (“may present”), so alternative formats remain permissible.
carbon footprint table, as its inclusion contradictsAR20 and may create confusion for stakeholders, particularly when calculating total scope 1–3 emissions.
Instead, we propose to create separate table containing scope 1 biogenic emissions, in line with the current ESRS structure, to ensure clarity and consistency.
increases the effort needed to ensure clarity and consistency. In particular, companies must provide clear explanations and cross references to demonstrate how the figures relate to each other.
ESRS E1
Resilience of strategy (E1-3 AR9) This shall provide its climate resilience at the “reporting date” is not clear as to what it refers to, “process" or "outcome".
If "process" is meant, we fail to see the relevance of this information;
If outcome: It seems conceptually understandable, but such a purely reporting date-specific statement only makes sense for individual locations or individual products/services/markets.
When considering location, product, and service portfolios, however, a date-specific assessment is not feasible. Furthermore, a historical analysis (which is what a reporting date analysis is) is questionable in the context of a strategically oriented disclosure such as E1-3.
Practitioners in particular fear potential conflicts with auditors in this regard.
ESRS E1
Effects of current and planned investments in climate mitigation, adaptation and transition opportunities on climate resilience (E13, AR10c)
In terms of the effects of current and planned investments in climate mitigation, adaptation and transition opportunities on climate resilience" (1) the requirement is not clear and (2) it seems as it is an additional requirement that does not exist in the DelegatedAct.
Delete the requirement.
ESRS E1
Flexibility for units (E1-8, 30)
ESRS E1
"Other emissions excluded" (E18, 30(c) ii)
ESRS E2
Sector-specific disclosure requirements (18 & 19; AR 4)
There is still no flexibility for units. Practitioners report pointless discussions with auditors about whether a disclosure in million metric tons is possible here. More flexibility is needed here.
Unclear what "other emissions excluded" means. If undertaking follows GHG boundaries with financial approach as perAR 19 for para. 30, the emissions reflect the consolidated financial scope.
Unclear which excluded emissions "shall" be reported or if there are criteria to define/calculate excluded emissions.
EFRAG proposes in its Technical Advice to include sector-specific disclosure requirements. While we understand that the rationale behind this proposal may be to avoid imposing additional reporting obligations on companies outside the chemical sector, we consider this approach inconsistent with the revised Accounting Directive, which re-moves sector-specific reporting requirements. Therefore
ESRS E2
Total number of Substances of High and Very High Concern (18; 19; 18 & 19 AR 5)
ESRS E2-5 paragraph 18 and 19 requires reporting the total number of Substances of High and Very High Concern. However, when allocating substances to individual hazard classes, double counting is unavoidable, as most Substances of Concern (SOCs) and Substances of Very High Concern (SVHCs) fall under multiple hazard classes.
Application Requirement 5 additionally specifies that substances should not be counted more than once when they are
As a result, the requirement cannot be implemented in a consistent or comparable manner until the underlying definitions or guidance are clarified, and should therefore be deleted.As long as the definitions or guidance remain unclear, we advocate for deleting the requirement to report the total number.
With regard to applicability ESRS E2-5 paragraph 18 and 19AR 5 should be added as follows: ' Undertaking reporting under paragraphs 18 and 19 shall present SVHC grouped by hazard class (as per CLP Regulation 1272/2008/EC)
ESRS E2
Substances of
Very High Concern (20 and 20; AR 8)
attributed to different hazard classes for the purpose of reporting the total number.
At the same time, it remains unclear which hazard classes must be included in this total.
Paragraph 20 of ESRS E2-5 requires an undertaking to disclose the names of the substances of very high concern that are present in a concentration above 0.1% weight by weight, as perArticle 33 of Regulation (EC) No 1907/2006 (REACH).
Further, this requirement forces companies to analyze all their purchased indirect materials, including even the smallest quantities for analysis, sampling and R&D for the presence of all SVHCs.
ESRS E3-4
Water metrics
Expansion of reporting requirements for water metrics. New: “Total water withdrawal” (c) and “Total water discharge” (d) have been added as mandatory disclosure items (“shall”). Both are non-mandatory “may” data points in the current ESRS.
under consid-eration of applicable thresholds according to CLP regulation.'
ESRS E4
Information on sites located in
Providing information on sites located in or near biodiversity-sensitive areas can be very time-consuming for
Reporting requirements for the management report should not lead to disclosures that are already publicly accessible from other sources. The information may refer to information the undertaking is already required to report under other legislation according to paraAR 7, including the Industrial Emissions Directive (IED, 2010/75/EU) and the E-PRTR (European Pollutant Re-lease and Transfer Register, Regulation (EC) No 166/2006).
Moreover, we therefore recommend that the European Commission take into account the information available through the ECHA CHEM and SCIP database.
Elimination of additional reporting requirements:
'The undertaking shall disclose the following water metrics for its own operations:
(a) total water consumption;
(b) total water consumption in areas with water stress;
(c) total water withdrawal; (d) total water discharge;
(e) total water recycled and reused; and (f) total water stored. '
To ensure actual simplification and avoid a remarkably time-consuming disclosure, we recommend allowing companies flexibility
The requirements proposed in paragraphs 20 and AR 7 represent a substantial expansion of reporting obligations compared to the current DelegatedAct, as in the current Delegated Act ESRS E2-5 does not mandate disclosure of the complete REACH lists.
Further, mandatory communication of SVHC in articles is after all EU-specific. For articles produced and placed on the market outside EU, only the manufacturer in non-EU reasonably has the required information that could be reported when the manufacturing company is an affiliate of a globally acting and reporting company.
The ESRS revision should not introduce new disclosure requirements through the back door. The data points added in the draft are sensitive information, and their disclosure should therefore not be mandatory
or near biodiversitysensitive areas (E4, Para 13 (b))
ESRS E4
Causality in the context of site in a biodiversitysensitive area (E4, AR 8 f0r Para 19)
infrastructure companies. Energy and water companies operate numerous facilities, networks, and infrastructure systems. These are subject to various permitting, protection, and compensation regimes.
It is important not to draw a direct causality between the site being in a biodiversity-sensitive area and its activities negatively affecting the area. That would in fact be an incorrect assumption as the activities have to fulfil all environmental requirements according to the law and the EIA. Therefore, their activities are in line with regulations and do not cause significant harm (or are otherwise compensated for).
ESRS E4
'drivers of biodiversity and 'ecosystem change' (AR 10(a) and 10(d))
Although is mentioned in the delegated act (ESRS E4.AR20f), it is not a metric requirement. The same applies to 'ecosystem services'. It is mentioned in the delegated act in several instances, but it is not a metric requirement.
in the interpretation of “near” and, more broadly, of which sites and areas are material in terms of impact.
ESRS E5
Circularity of material flows (E5-4)
Certain disclosures on Resource inflows and outflows, notably the requirement to identify which critical and strategically relevant raw materials are used by the undertaking and to disclose the designed recyclability rate of its “key products” were introduced on a more granular
Do not draw a direct causality between the site being in a biodiversity-sensitive area and its activities negatively affecting the area.
Make clear, that 'drivers of biodiversity and ecosystem change' and 'ecosystem services' is not a metric requirement.
Additional metric requirements do not lead to simplification; rather, they lead to an additional workload.
For the sake of simplification, we find that the descriptive approach of the previous ESRS would still provide a comprehensive coverage of “drivers of biodiversity and ecosystem change” and “ecosystem services”.
Disclosures should be allowed to focus on reporting where data is available.
New datapoint on critical raw materials should be deleted.
Requirements of the new ESRS E5-4 do not read as a simplification but rather as a
Data collection and reporting on key materials is challenging as ERP systems are not designed for circularity tracking and supplier data is fragmented. Definition of key materials leaves room for interpretation and judgement.
The draft refers to various categories of raw materials, including “critical raw materials,”
ESRS E5
Resource outflows (E55)
level compared to Set 1 (i.e. breakdowns), increasing the data requirement and thus entailing extensive IT or resource-manual reporting processes.
Also, disclosing information on purchased (critical/strategic) materials is sensitive information which could weaken the market competitiveness of EU companies (e.g., supplier dependencies, negotiating positions, risk exposures).
tightening of the requirements and should be critically reviewed.
Proposed text:
▪ 'The undertaking shall disclose the following information:
▪ (a) the key materials used, providing for each a concise description and specifying any critical raw materials and strategic raw materials it contains;
▪ (b) the total weight of all key materials;
▪ (c) a breakdown of each key material, expressed in weight or as a percentage of the total weight of all key materials; and
1. (d) the secondary resources used, expressed in weight or as a percentage of the total weight of key materials. '
“strategic raw materials,” “key materials,” and “secondary raw materials.
The revised standards require a breakdown of each key material, expressed in weight or as a percentage of the total weight of all key materials. This represents a stricter requirement, as ESRS Set 1 only required the total weight of all key material inflows. In practice, this entails a significant additional burden and could potentially conflict with Intellectual Property protection requirements.
There is no clear-cut definition of ‘key materials’and a threshold leading to legal uncertainty. Every company may define this differently.
Further, reporting and precise descriptions on "strategic raw materials" is not about ESG/sustainability reporting. Reporting must not be used as vehicle for data-collection for geostrategic questions of the European Union.
ESRS S1
“Top 10
Countries” (20 (a) AR 9)
'Recyclable' is not defined and therefore 'the designed recyclability rate' is neither meaningful nor comparable.
Delete or replace with qualitative 'information on recyclable materials included in its key products and in their packaging'.
There is still a mismatch between DR 20 andAR 9 Table 2:
▪ DR 20 requires disclosure of the number of employees (headcount) for each country where the company has 50 or
Provide guidance on 'recyclable'.
Delete the concept of the “Top 10 countries” and keep the initial ESRS requirements as defined in Delegated Regulation (EU) 2023/2772. There must be change in the country definition (from largest 10 countries to min.10% of
Reporting should be focused on providing decisionuseful information. It should support strategic and targeted action, linking disclosure to actual corporate sustainability performance and impact.
ESRS S1
Remuneration metrics (S1-15)
more employees, limited to the ten largest countries by workforce size.
▪ AR 9 Table 2, however, refers to countries with 50 or more employees that also represent at least 10% of the company’s total workforce.
The first approach would reduce flexibility and forces a disaggregation that may not be decision-useful (e.g., forced reporting in some areas while ignoring true hotspots).
It may also increase the reporting burden for multinational companies, as many would need to report on more countries than before. Each additional country brings its own data collection challenges, due to differences in local data infrastructure and IT systems.
workforce) also in ESRS S1-5 para.AR 9 to be consistent and avoid an overrating of countries that are not significant for the undertaking (in particular referring to DRs that are following to this definition e.g. collective bargaining). This might otherwise lead to high effort for in fact small countries for bigger multinational companies.
Provide instead a more principle-based, materiality-focused approach, which gives companies flexibility to highlight countries where social risks are significant and where the company’s actions have the greatest impact.
To achieve this, the approach presented in the current standards (DelegatedAct) should be reintroduced in all relevant S1- S4 paragraphs andARs: “countries in which the undertaking has 50 or more employees representing at least 10% of its total number of employees.”
This change could reduce interpretation ambiguity and improve clarity of application. It could enhance comparability of country-level disclosures across entities and avoid unnecessary reporting complexity by focusing on material workforce concentrations.
Changing the reporting requirement from “50 employees and 10% of total headcount” to the “top 10 largest countries by employee headcount (if >50 employees)” will force many multinational companies to re-port on more countries than before. Each additional country creates unique datacollection challenges, particularly due to differences in data infrastructure and IT systems especially for S1-7 Social Dialogue (former S1-8).
We strongly disagree with the proposed threshold change, as it does not reduce reporting burdens and, in many cases, significantly increases both reporting requirements and audit scope.
Reporting on salary range from lowest paid individual to highest paid individual is based on sensitive information, putting burden on data collection and auditing process.At the same time, the disclosure is not very meaningful.
This datapoint should be deleted. Mandatory disclosure of the unadjusted pay gap is not always the most meaningful and actionable insight into pay equity within the organization. For many companies, this number can be misleading because it reflects workforce composition rather than true inequity (e.g., a company with more men in senior roles will naturally show a larger unadjusted gap, even if pay policies are fair at each level.)
ESRS S1
Health and safety metrics
(S1-13, para. 36 and Annex II glossary)
The definitions of recordable workrelated accidents and recordable workrelated ill-health remain ambiguous:
▪ Recordability threshold based on ≥3 lost workdays: This introduces a non-standard criterion that conflicts with international norms and can distort safety data, including underreporting risks; it is also inconsistent with the treatment of ill-health.
▪ The current definition proposal uses the term "recordable workrelated accident" encompasses fatalities, the calculation of "days away from work" must be understood to apply solely to non-fatal incidents – as the rational presented by EFRAG in previous documentation.
ESRS S1
climate
transition and “positive impacts”
(S1-3, 'AR5 for para 17)
ESRS S1
numbers of non-employees
(S1-6, para 22)
ESRS G1
Metrics related to corruption
The impacts of "climate transition" might also lead to positive impacts (whileAR5 only refers to negative impacts due to e.g. mass job loss). The transition to a low-carbon economy could also show positive impacts.
Materiality considerations as basis for reporting. Nonetheless, reporting organizations need to report numbers of non-employees which are effortful to evaluate or seriously estimate.
Deletion of “more than three days of absence” and addition of “absence from”, in the definition of work-related accident to ensure harmonization on the data collection with the scope of S1-13, 36 (e).
For work-related ill-health: reinstall the formerAR92 to improve clarity and classification, es-pecially for musculoskeletal disorders (MSDs).
We would appreciate a more balanced wording in this context.
If considered immaterial, then no disclosure should be requested.
Reporting on monetary value of fines and settlements is based on sensitive and confidential information. This data point should be deleted.
and bribery (G1-4)
ESRS G1
Standard payment terms
ESRS G1
Addition of “and sanctions” (G1-4)
ESRS G1
Indirect financial contributions outside the EU (G1-5)
The calculation of some complex metrics related to payment practices, particularly the percentage of payments that comply with standard terms is especially challenging for companies operating in multiple countries and across many different products or services, each of which may have different payment rules.
In addition, reporting legal proceedings related to late payments without context offers little decision-useful information (material cases are already covered in legal risk reporting).
Adding “and sanctions” introduces a new requirement that was not part of the initial ESRS, conflicting with the revision’s goal of simplification.
Collecting information for this datapoint is highly burdensome and raises legal concerns, especially regarding indirect financial contributions outside the EU.
Delete the disclosure requirements on standard payment terms, the percentage of payments aligned with such terms, and the number of legal proceedings due to late payments.
Alternatively, limit the disclosures to highlevel qualitative descriptions without quantitative metrics and remove the requirement to categorize suppliers (e.g. SMEs).
Reduce by this change the reporting complexity and burden while keeping the information meaningful. Support proportionality and feasibility. Ensure that disclosures are decision-useful, proportionate and feasible to implement, while avoiding duplication with existing financial reporting requirements.
Remove “and sanctions” from the requirement.
Limit the scope from “global” to “EU and Member States” or delete the data-point(s).
The approach to identifying and accounting for sanctions remains unclear and the added value is questionable.
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The Federation of German Industries (BDI) communicates German industries’ interests to the political authorities concerned She offers strong support for companies in global competition. The BDI has access to a widespread network both within Germany and Europe, to all the important markets and to international organizations. The BDI accompanies the capturing of international markets politically. Also, she offers information and politico-economic guidance on all issues relevant to industries The BDI is the leading organization of German industries and related service providers. She represents 40 inter-trade organizations and more than 100.000 companies with their approximately 8 million employees. Membership is optional. 15 federal representations are advocating industries’ interests on a regional level.
Imprint
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T: +49 30 2028-0
German Lobbyregister Number: R000534
EU Transparency Register: 1771817758-48
Contact
Julian Winkler
Policy Officer Sustainability Reporting, Budgetary Policy and R&D Tax Initiatives
Mobile: +49 15151840811
j.winkler@bdi.eu
BDI document number: D 2312