Reporting Intelligence – January 2026
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This month’s reporting intelligence examines major EU regulatory rollbacks, UK sustainability standards updates, CDP’s record A-list performance, the FCA’s 2027 IFRS-aligned proposals, and investor concerns over simplified ESRS requirements.
European Parliament approves major rollback of corporate ESG requirements
The European Parliament has approved a provisional agreement to substantially reduce sustainability reporting and due diligence obligations for companies. The Omnibus I package raises CSRD thresholds to 1,000 employees and €450 million revenue, excluding approximately 90% of previously covered firms. CSDDD requirements have been scaled back even more dramatically, now applying only to companies with 5,000+ employees and €1.5 billion revenue. Additional changes include removing climate transition plan obligations and EU-wide liability provisions, whilst capping penalties at 3% of global revenues. The agreement also limits information requests from smaller supply chain companies. Final adoption requires EU Council approval.
Read more here.
UK SRS update: implementation reliefs to be specified in regulations
The Department for Business and Trade (DBT) has updated the Financial Conduct Authority on UK Sustainability Reporting Standards development. Following consultation on UK SRS S1 and S2 exposure drafts, most respondents supported the content, but the implementation approach will change. Specific time references for relief applications will be removed from the standards; instead, timing will be specified in government regulations, FCA rules, or by relevant authorities. DBT will also clarify compliance statements for reporters using reliefs. The final UK SRS S2 will incorporate recent IFRS S2 amendments and is expected in early 2026.
Access the letter here.
CDP Reports 70% Surge in Top-Scoring Companies for Sustainability Performance
CDP reported a 70% increase in companies achieving top “A” sustainability scores in 2025, rising to 877 companies from last year. “Triple A” recipients nearly tripled to 23 companies. Climate A-list companies increased 63% to 751, Water Security scores nearly doubled to 263, and Forests more than doubled to 55. Despite fewer companies disclosing (22,100 versus 22,777), 640 investors managing $127 trillion requested disclosures. Asian and European companies led performance, with Japan, France and Türkiye each having 12% of their reporting companies achieving A-list status.
Read the full CDP A list here.
FCA proposes IFRS-aligned sustainability reporting requirements for companies from 2027
The Financial Conduct Authority has launched a consultation proposing significant changes to sustainability reporting requirements for listed companies, effective January 2027. The new rules would require the implementation of UK Sustainability Reporting Standards (UK SRS), based on IFRS standards, expanding obligations beyond current climate-related TCFD disclosures to broader sustainability matters.
The proposal aims to align UK reporting with international standards, providing investors with consistent information whilst reducing duplication for overseas companies. Recognising implementation challenges, the FCA proposes transitional relief: one year for Scope 3 emissions data, two years for general sustainability disclosures (UK SRS S1), both then operating on a “comply or explain” basis.
Whilst transition plans and assurance requirements remain governmental matters, companies must disclose whether they’ve published transition plans or obtained third-party assurance. The consultation closes 20 March 2026, with final rules expected in the autumn of 2026.
Access the consultation here.
EFRAG Study finds that 67% of investors anticipate negative impacts from simplified EU Sustainability Reporting Standards
A new EFRAG study reveals significant investor concerns about the proposed simplified European Sustainability Reporting Standards (ESRS), with 67% of investors and financial institutions anticipating reduced information quality. Key concerns include decreased comparability and loss of critical climate and environmental data.
Conversely, reporting companies welcomed the changes, expecting substantial cost savings of €3.7 billion (2027-2031), a 34% reduction, driven by a 61% decrease in mandatory datapoints. Companies anticipate enhanced clarity and no impact on green finance access.
The simplified ESRS, part of the EU’s Omnibus initiative to reduce regulatory burden, eliminates over 70% of total datapoints and increases reporting flexibility. Whilst 68% of users acknowledge improved data relevance and usability, investors remain sceptical about the benefits.
The study highlights a fundamental tension: companies celebrate reduced compliance costs, whilst investors fear diminished decision-useful information.
Read the full study report here.
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