European Financial Reporting Advisory Group publishes 2026 ESRS State of Play Report based on 905 assured sustainability statements

The European Financial Reporting Advisory Group has published its 2026 State of Play Report on implementation of the European Sustainability Reporting Standards, based on 905 assured fiscal year 2025 sustainability statements. The report finds that reporting practices were broadly stable in the second year of ESRS application, with E1 Climate Change, S1 Own Workforce and G1 Business Conduct remaining the most frequently identified material topics at 99%, 98% and 95% respectively. It also notes that sustainability statements became shorter on average, falling to 95 pages from 115, while still accounting for about one-third of annual reports. The analysis expands on the prior edition with new evidence on double materiality assessments, executive incentives and geographical breakdowns of environmental metrics. Among the sample, 81% of companies updated their double materiality assessment from fiscal year 2024 and 67% used a hybrid top-down and bottom-up approach. Climate-related disclosure increased, with 69% reporting a climate transition plan and 58% disclosing near- and long-term decarbonisation targets aligned with a 1.5 degrees Celsius pathway. Companies identified an average of 6.4 material ESRS topics but set measurable targets for 3.3, while 63% linked sustainability performance to executive incentive schemes. The report also highlights an average unadjusted gender pay gap of 14.6%, disclosure of human rights policies by 89% of companies and use of ESG criteria in supplier selection by 79% of companies.