How the Draft European Sustainability Reporting Standards Compare to Proposed Standards Globally

Published: June 2022


A draft of new European sustainability standards is the latest in a series of proposed climate and sustainability disclosures in Europe and the United States. We compare the proposals and what companies can do to prepare.

A recent draft of the European Sustainability Reporting Standards (ESRS) — the first set of reporting standards that will be required for companies that fall under the Corporate Sustainability Reporting Directive (CSRD) — goes well beyond climate reporting. The proposed reporting standards are expected to be finalized in November 2022 and cover a full range of environmental, social, and governance (ESG) issues including climate change, pollution, water and marine resources, biodiversity, resource use, workers in the value chain, governance, risk management, business conduct and more.

The draft ESRS are more rigorous than other reporting proposals and would apply to a large contingent of companies, including all large companies (defined as meeting two out three of the criteria: €40 million in net turnover, €20 million on the balance sheet, and/or at least 250 employees) governed by or established in a European Union (EU) member state and all European stock exchange-listed companies. This increases the scope to about 50,000 companies and will greatly increase reporting requirements for companies based in the U.S. that have large subsidiaries in the EU.

These proposals may evolve (ISSB has already noted plans to expand reporting requirements beyond climate), but for now, ESRS remains the most comprehensive proposal to date.

As much as U.S. and EU regulators have worked to harmonize these newly proposed standards with global frameworks, the distinctive differences in the ESRS, SEC, and ISSB proposals outlined above mean that global companies required to comply with multiple sets of standards face a significant reporting hurdle. This will no doubt be further complicated with the UK’s expected adoption of ISSB standards, which as of now, remain voluntary. The UK government has not committed to a specific date.

With implementation dates on the horizon, global companies should evaluate their preparedness and timelines to align with new regulations.

Next Steps

The comment period for the draft ESRS is August 8. The comment periods for the SEC and ISSB proposals close on June 17 and July 29, respectively. Implementation dates may vary depending on the volume of comments received, but all three are expected to be finalized by the end of 2022.

We help our clients navigate these proposed standards by mapping current sustainability disclosures to expected requirements to determine which areas companies need to focus on to bring their reporting into compliance.

U.S.-based companies, which will be subject to climate reporting requirements for the first time, will likely need to take a comprehensive view of their progress along a climate maturity curve (see Figure 2) to determine next steps as they prepare to comply with pending SEC climate rules. EU companies will also need to undertake a similar gap analysis to advise where enhanced disclosure is needed as they transition from current reporting to the more robust ESRS.

If you’d like to speak with one of our ESG experts about these developments and how we can help, please write to

General Disclaimer
The information contained herein and the statements expressed are of a general nature and are not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information and use sources we consider reliable, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation.

Terms of Use
The contents herein may not be reproduced, reused, reprinted or redistributed without the expressed written consent of Aon, unless otherwise authorized by Aon. To use information contained herein, please write to our team.

Talk to an Expert

Let us know how we can help and a member of our team will be in touch shortly.

Aon group companies will use your personal information to contact you from time to time about other products, services and events that we feel may be of interest to you. All personal information is collected and used in accordance with our privacy statement.

If you do not wish to receive these communications, please check here: