‘Quick-fix’ amendments to the ESRS for Wave 1 entities

Since the CSRD initially became law, there have been increasing demands in the European Union to streamline the requirements and reduce the reporting burden associated with sustainability reporting. As a result, in February 2025, the European Commission (EC) released a new package of proposals (the Omnibus) to amend some key pillars of the European Green Deal. The key pillars are the CSRD, the Corporate Sustainability Due Diligence Directive (CSDDD), and the Taxonomy Regulations. The overall goal of the Omnibus is to reduce reporting burdens, particularly for smaller and mid-sized entities, and increase efficiency in sustainability reporting.  

In April 2025, the ‘stop-the-clock’ directive was adopted. This directive postponed: 

• the CSRD requirements for large entities that have not yet started reporting, as well as SMEs (Wave 2 and Wave 3 respectively), by two years – from 2025 to 2027 or from 2026 to 2028 depending on the original application date, and
• the transposition deadline and first phase of application of the CSDDD by one year – from July 2027 to July 2028. 

However, the CSRD element of the ‘stop the clock’ directive did not refer to Wave 1 or non-EU reporting entities, and as such, the relief did not extend to those entities. The CSDDD postponement does apply to Wave 1 reporting entities. 

The ‘quick fix’ delegated act adopted by the EC on 11 July 2025 is aimed at addressing this gap in the CSRD relief for Wave 1 reporting entities.   

Summary of modifications

The current ESRS allow Wave 1 reporting entities to omit certain information from their first year of reporting under ESRS (ie for financial years beginning on or after 1 January 2024).  

The following information, which was allowed to be omitted for reporting periods beginning on or after 1 January 2024, has been extended by the ‘quick fix’ amendments to allow omission for 2025 and 2026 for Wave 1 entities up to 750 employees: 

• Scope 3 GHG emissions and total GHG emissions
• All information under  ESRS E4 ‘Biodiversity and ecosystems’  
  • ESRS S1 ‘Own workforce’,
  • ESRS S2 ‘Workers in the value chain’,
  • ESRS S3 ‘Affected communities’, and
  • ESRS S4 ‘Consumers and end-users’.

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In addition, the amendments extend the phase-in provisions related to ESRS E4, ESRS S1, ESRS S2, ESRS S3, and ESRS S4 that initially applied to entities with up to 750 employees to those with 750 or more employees for periods beginning on or after 1 January 2025. 

The following changes were made for Wave 1 entities with more than 750 employees:

These phase-in reliefs that are being extended to entities with more than 750 employees will not apply to any reporting periods before 1 January 2025. This means if a reporting entity has a non-calendar year-end beginning in 2024 and has not yet completed their reporting, it cannot apply these reliefs. In other words, a reporting entity with more than 750 employees with a year-end between now and 31 December 2025 (and therefore a reporting period beginning before 1 January 2025) will still need to apply ESRS E4, ESRS S2, ESRS S3, and ESRS S4 as originally drafted for that period, if material. 

The delegated act text can be accessed here [pfd, 166kb] and the full summary of modifications can be accessed here [pdf, 162kb]. 

Our thoughts

We believe that these amendments will be a welcome relief to Wave 1 reporting entities, which were not captured by the ‘stop-the-clock’ directive. As the ESRS are being revised, this ‘quick fix’ delegated act allows Wave 1 reporting entities to prepare their 2025 reporting in accordance with previous reporting, rather than implementing new requirements that may be changed in the future.

Although we believe that these amendments will be helpful, we have concerns about the 1 January 2025 effective date and subsequent impact on Wave 1 reporting entities with more than 750 employees for a non-calendar year-end. The effective date may result in confusion around whether the reporting entity can apply the relief in the first year of reporting. Based on the requirements as drafted, reporting entities with that particular set of characteristics will need to apply the full set of requirements for one year, before being able to apply the new reliefs in their future reporting. 

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