EFRAG State of Play Report 2026: ESRS FY2025 Observed Practices

EFRAG’s 2026 State of Play Report examines how companies applied the Corporate Sustainability Reporting Directive (CSRD) and European Sustainability Reporting Standards (ESRS) in their second reporting cycle. Based on 905 assured FY2025 sustainability statements, it analyzes double materiality, material topics, climate transition plans, sustainability targets, executive incentives, gender pay gaps, human rights and ESG supplier practices.

EFRAG202623 Sept 2026

PublisherEFRAG

Year2026

RegionEU

FormatPDF, 2.6 MB

7views

Key Takeaways

EFRAG analyzed 905 FY2025 sustainability statements subject to third-party assurance, up from 656 in its inaugural study, using an expanded set of 18 questions covering cross-cutting, environmental, social and governance disclosures.
82% of companies updated their Double Materiality Assessment, with 67% using a hybrid methodology. Companies identified an average of 6.4 material ESRS topics, while Climate Change and Own Workforce were material for 99% of preparers and Business Conduct for 95%.
Companies set measurable targets for an average of only 3.3 of their 6.4 material ESRS topics, while 63% linked sustainability targets to executive incentive schemes, highlighting a gap between identified materiality and formal performance management.
The share of companies disclosing a Climate Transition Plan rose from 55% in FY2024 to 69% in FY2025, while 57% disclosed both near- and long-term decarbonization targets compatible with a 1.5°C pathway.
The study found an average unadjusted gender pay gap of 14.3% in favour of men, while only 12% of companies also disclosed an adjusted pay gap. Separately, 89% of relevant preparers disclosed human rights policies covering workers in the value chain or affected communities, and 81% of companies where supplier relationship management was material referenced ESG criteria in supplier selection.