Upcoming on our site: Exhaustive guidelines for the unveiling process revealed in due course.
The European Commission has announced a revised timeline for the detailed provisions of the European Sustainability Reporting Standards (ESRS), providing additional preparation time and reduced reporting complexity for market participants.
The consultation period on the draft revised standards is open from July 31, 2025, until September 29, 2025. After this, the European Financial Reporting Advisory Group (EFRAG) will finalize technical advice for the European Commission by November 30, 2025.
A significant development is the "quick fix" delegated act adopted on July 11, 2025. This act provides targeted amendments to the ESRS for "Wave 1" companies, allowing them flexibility and extended phase-in relief through 2026. This means that these companies can avoid reporting additional information beyond what they reported for 2024 and omit certain disclosure requirements related to biodiversity, workers in value chains, affected communities, and consumers where topics are material only in summary form.
As a result, market participants, particularly Wave 1 reporters, have more time and reduced reporting complexity for the near-term reporting cycles (2025-2026). This support a phased and manageable implementation of ESRS obligations.
For companies in subsequent waves, the “stop-the-clock” Directive postpones the application of requirements initially set for financial years 2025 or 2026, further extending preparation time for those affected.
The detailed ESRS revisions are under consultation until late September 2025, with final Commission advice expected by November 2025. The Commission is combining 13 technical regulatory standards into a joint delegated act, and it is unclear what non-sustainable share a portfolio can contain to still be considered sustainable.
The European Commission's decision is aimed at enabling product manufacturers, financial advisors, and financial supervisors to implement the detailed rules smoothly. The German Federal Financial Supervisory Authority (BaFin) also reports on this communication, and sustainability is a central topic that could also affect the intermediary segment in the future.
It is worth noting that financial asset intermediaries who are active under Section 34f of the German Trade Regulation Act do not have to disclose their sustainability efforts for the time being. However, the intermediary associations AfW and Votum recommend that these financial professionals also implement the rules in their businesses.
The disclosure regulation obliges market participants to make their actions regarding sustainability transparent. The Commission's letter to the ESAs (EBA, ESMA, and EIOPA) communicates this plan, and the ESAs only sent joint proposals for some technical regulatory standards to the EU Commission on February 4th. The Commission intends to bundle all drafts and bring them forward as a joint legislative package.
The new legal binding date for the regulation is July 1st, 2022. Until the detailed provisions become legally binding, BaFin will only base its supervisory activities on the regulation text itself. Questions remain open without detailed provisions, such as when a financial product is truly a sustainable investment.
Sources: 1. [Link to Source 1] 2. [Link to Source 2] 3. [Link to Source 3] 4. [Link to Source 4] 5. [Link to Source 5]
In the context of the revised European Sustainability Reporting Standards (ESRS), market participants, including Wave 1 reporters, have a chance to provide feedback during the consultation period from July 31, 2025, to September 29, 2025. After this, another challenge arises for all parties concerned – determining the maximum non-sustainable share a portfolio can contain while still being considered sustainable, which remains unclear in the current situation. Other financial professionals, such as financial asset intermediaries, are also advised to supplement their business operations with the new ESRS disclosure regulations, as they become binding on July 1, 2022, and will affect various segments of the industry in the future.
