Reporting Intelligence – August 2025
Our Reporting Intelligence pages are a treasure trove of insightful reads, we’ve done the hard work, so you can stay informed without the hassle.
This month, we bring you the latest filtered from EFRAG and the EU Commission, and surveys from PwC, FRC and Deloitte.
EFRAG releases simplified European Sustainability Reporting Standards for consultation
The European Financial Reporting Advisory Group (EFRAG) has published revised European Sustainability Reporting Standards (ESRS) exposure drafts, dramatically reducing corporate reporting burdens under the EU’s Corporate Sustainability Reporting Directive. The updated standards eliminate all voluntary disclosures and cut reporting datapoints by 68%, exceeding initial reduction estimates.
Key simplifications include streamlined double materiality assessments, improved readability, and enhanced alignment with IFRS sustainability standards. EFRAG shortened the standards by over 55% following extensive consultations with companies that reported disproportionate effort in current reporting processes. The changes form part of the European Commission’s broader Omnibus I proposal to reduce regulatory burdens. A 60-day consultation period runs until September 2025, with final standards due November 2025.
Access the new ESRS exposure drafts and consultation here
EU Commission adopts voluntary Sustainability Reporting Standard for SMEs
The European Commission has adopted the Voluntary Standard for SMEs (VSME), enabling small and medium-sized companies to report on ESG issues in a simplified manner and respond to sustainability data requests from larger firms and financial institutions. Developed by EFRAG, the standard features two modules: a ‘Basic’ level with 11 key disclosures including emissions data, and a ‘Comprehensive’ module with nine additional disclosures covering targets and transition plans.
Initially designed for companies with under 250 employees outside the Corporate Sustainability Reporting Directive scope, the VSME’s relevance has expanded due to the Commission’s Omnibus initiative, which proposes raising the CSRD threshold to companies with over 1,000 employees, potentially removing 80% of currently covered firms from mandatory reporting requirements.
PwC provides high-level look on three UK Government consultations on reporting
The Government has released a package of three consultations as the first phase of modernising the UK’s sustainability reporting and assurance framework, supporting its ambition for the UK to lead in sustainable finance. The consultations include: the exposure drafts of UK Sustainability Reporting Standards (UK SRS); an oversight regime for supervising sustainability-related financial disclosures; and transition plan requirements.
They will close on 17 September 2025. Further consultations are expected before any amendments are made to UK laws or regulations.
Deloitte publishes survey on climate-related reporting
Deloitte reports that most companies consider UK SRS or ISSB standards when preparing disclosures, with 7% explicitly mentioning ISSB standards. All companies assign responsibility for climate or sustainability to the board or a committee. Scenario analysis is common, ranging from two to nine scenarios. About 47% disclose plans for transitioning to a low-carbon economy, while 43% provide less detailed information on targets.
The majority, 77%, discuss potential climate impacts on finances, mostly qualitatively. All companies have climate targets, mainly Scope 1 and 2 emissions, with 97% reporting Scope 3 metrics despite data challenges. Additionally, 90% seek external assurance for reporting metrics.
FRC releases its Annual Reviewof Audit Quality 2025
The Annual Review of Audit Quality highlights the FRC’s assessment of current standards, progress, and future plans. It covers the regulator’s views on implementing ISQM1 during this inspection cycle, our review of firms’ audit quality through inspections, and other supervisory activities. The review also discusses developments in the audit landscape over the past year, emphasising our regulatory approach and its market impact.
Included are case studies demonstrating our role as an improvement regulator committed to the public interest and UK economic growth. Additionally, the review outlines advancements in the FRC’s Future Audit Supervision Strategy, reflecting ongoing efforts to enhance audit quality and supervision.
Deloitte releases survey on Internal controls and effectiveness reporting
The survey highlights that most companies now incorporate risk appetite into their risk management frameworks, with 88% including descriptions and half explaining the different categories or influencing factors. Regarding the three lines of defence, 48% clearly outlined operational management, internal monitoring, and audit functions, while 20% explained some aspects, and 32% made no reference.
Additionally, 82% prepared for the new declaration on controls effectiveness, and 48% focused monitoring on material controls. A third of companies provided positive assessments of their risk systems, with variations in attestations and conclusions, reflecting evolving compliance efforts and increased emphasis on internal control frameworks and assurance policies.
Receive monthly up to date reporting insights, directly to your inbox
Subscribe to our newsletter
Get in touch:
If you’d like to discuss this, or any other subject, please get in touch with Richard Costa at richardc@gather.london
We’d love to hear from you.