Norges Financial institution Funding Administration (NBIM), the funding supervisor for Norway’s $2 trillion oil fund issued a response to the European Fee’s session on the revised European Sustainability Reporting Requirements (ESRS), together with calling on the Commissions to permit firms to satisfy the necessities of each the ESRS and ISSB requirements in a single report.
Based on NBIM, the nearer alignment of the requirements would allow buyers to extra simply examine sustainability info between firms in numerous jurisdictions, and permit firms to keep away from twin reporting, supporting the EU’s simplification agenda to cut back prices and burden on firms.
The EU Fee’s session follows its launch final month of the brand new draft ESRS, one of many remaining main steps within the Fee’s initiative to simplify sustainability reporting necessities for firms beneath its Omnibus I initiative, launched early final yr.
The Omnibus package deal, accepted by EU lawmakers earlier this yr, dramatically lowered the variety of firms lined by the EU’s obligatory Company Sustainability Reporting Directive (CSRD) by 90% by eradicating firms with lower than €450 million in income and 1,000 workers, in comparison with the prior 250 worker threshold.
Along with dramatically decreasing the variety of firms included inside the scope of the EU’s obligatory Company Sustainability Reporting Directive (CSRD), the Omnibus initiative additionally sought to considerably simplify and cut back sustainability reporting necessities for these remaining by the introduction of a revised ESRS. The revised ESRS are based mostly on technical recommendation ready by the European Monetary Reporting Advisory Group (EFRAG). EFRAG submitted its finalized proposed revision of the ESRS in December 2025, with key modifications together with a discount in obligatory datapoints of 61%, and the elimination all voluntary disclosures, leading to a complete datapoint discount of over 70%.
Whereas supporting the Fee’s efforts to simplify the ESRS, in its session response, NBIM urged the Fee to go additional in aligning the requirements with the ISSB requirements.
The IFRS Basis’s Worldwide Sustainability Requirements Board (ISSB) launched its inaugural common sustainability (IFRS S1) and local weather (IFRS S2) reporting requirements in June 2023, with a deal with offering buyers with materials monetary details about firms’ sustainability-related dangers and alternatives.
NBIM famous that the ISSB requirements “have develop into the worldwide baseline for sustainability reporting,” with adoption so far by 42 jurisdictions, representing roughly 60% of worldwide GDP.
Previous to the Fee’s launch of the draft ESRS final month, media experiences had indicated that the Fee had thought of introducing a lot nearer alignment with the IFRS Basis’s ISSB requirements, resulting in warnings that the revision may have diminished the prominence of the European normal’s “double materiality” strategy which focuses reporting each on the dangers and impression of sustainability points on an enterprise, in addition to on the enterprises’ impacts on surroundings and society.
In its response, NBIM famous that the IFRS Basis’s requirements allows jurisdictions to undertake the ISSB whereas “including necessities suited to their broader sustainability ambitions. “
NBIM stated:
“Have been the EU to construct on the ISSB mannequin, it may proceed to pursue its double materiality goals whereas preserving the financially materials info buyers want comparable throughout frameworks.”
Among the many key particular suggestions included in NBIM’s response is for the introduction of two focused technical amendments that may enable firms to satisfy the necessities of each the ESRS and ISSB requirements by a single report. The amendments would come with a “non-obscuring precept” that may require investor-relevant info inside a sustainability assertion to be clearly identifiable and never obscured by disclosures directed at different audiences, and a “flexibility in presentation format” giving firms the choice to current disclosures in a method that facilitates compliance with each frameworks.
Extra suggestions made within the NBIM response included avoiding new amendments within the revised ESRS that scale back interoperability with ISSB requirements, referencing IFRS industry-based steerage – which contains the sector-focused Sustainability Accounting Requirements Board (SASB) Requirements – within the ESRS double materiality evaluation to strengthen industry-specific monetary materiality alignment with ISSB Requirements, and dealing with the ISSB because it develops its nature-related disclosure observe assertion to assist convergence between European and world approaches.
In a submit asserting the response, Carine Smith Ihenacho, Chief Governance and Compliance Officer at NBIM, stated:
“The draft is a step ahead however true simplification means one report, not two. Meaning aligning European requirements with the Worldwide Sustainability Requirements Board (ISSB) Board Requirements, the worldwide baseline adopted in over 40 international locations. We imagine a couple of focused reforms can ship this and firms, buyers and European capital markets all stand to realize.”
