The Ethos Foundation published its position paper on the European Commission’s proposal, which aims to further weaken the European Sustainability Reporting Standards (ESRS). As part of this consultation process, Ethos identifies four proposed relaxations that could undermine the comparability and reliability of sustainability information for investors.
Whether in the United States, Switzerland or Europe, high-quality corporate sustainability reporting requirements are under attack. Under the pretext of reducing rampant and costly bureaucracy, policymakers are opting for extensive deregulation, at the risk of undermining non-financial transparency requirements and depriving investors of access to information essential to their investment decisions.
It is against this backdrop that the Ethos Foundation is participating in a consultation process currently being conducted by the European Commission with a view to revising the European Standards on Sustainability Reporting for Companies (ESRS). While Ethos has never opposed the simplification of regulations, it has always advocated for the conservation of high-quality reporting that enables investors and all stakeholders to gain a clear understanding of how companies manage their sustainability-related challenges. The publication of such information is essential if we are to ensure that capital is redirected towards companies that contribute to a sustainable economy and the transition to carbon neutrality.
Adopted in 2023, the ESRS has since been heavily criticised for containing too many data points, placing an excessive burden on companies and lacking clarity. It was this criticism that led the European Union to review its corporate sustainability regulations and adopt its ‘Omnibus’ simplification package.
It is in this context that the European Commission published, in early May 2026, a draft delegated act aimed at amending the ESRS, which has been put out for consultation. In its position paper, Ethos has identified four areas of concern that could undermine investors’ ability to assess sustainability-related risks and opportunities and to inform their capital allocation decisions. These four relaxations give companies complete discretion to define what is relevant and what is not. The decision to publish the indicators is based on subjective, self-assessed and unverifiable criteria, which undermines the comparability, reliability and usefulness of sustainability information for investors.
