Emperor Sustainability Briefing 14.08.2025

Issue #2

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Welcome to Issue 2 of Emperor’s new Sustainability Briefing – still here? Excellent.

‘Simplification’ might be the theme of the fortnight, with Europe and the UK streamlining regulations and lightening the load. Elsewhere, the US continues the war on ESG, while the UK grid continues to green.

In this Briefing...

ESRS disclosures slashed – FCA streamlining

SME data burden – UBS quits coalition

Trump targets climate law – £8bn for UK grid

Regulation and Frameworks

Major revision of ESRS slashes disclosures by 68%

One of the core commitments of the EU Omnibus – the policy package launched earlier this year aimed at reducing the scope and burden of EU sustainability directives – was to simplify and reduce the European Sustainability Reporting Standards (ESRS), the underlying reporting standards of the CSRD. EFRAG, the body responsible for the standards, has now released its draft ‘Revised ESRS’, and celebrates an overall reduction in disclosures of 68%. You can access all 12 revised documents here, with EFRAG also sharing revision logs for each standard.

The changes are significant, going beyond even original estimates for how much of ESRS would be cut or altered. Whether the Omnibus will have the overall effect of freeing up teams to focus on action, or of deprioritising the budgets and attention owed to sustainability, is yet to be fully determined – however, the revised ESRS will certainly reduce burden for corporate sustainability teams, and be welcomed by those who believed the standards were unnecessarily granular and demanding.

What’s changed?

The overall structure and topics of the standard set have been maintained, but each standard has been subject to meaningful line edits throughout. The main changes are summarised below:

Mandatory datapoints: According to EFRAG, 57% of mandatory datapoints have been cut. To give examples, this includes energy intensity associated with activities in high impact sectors (from E1), and employees who left the business during the period (from S1). It’s worth noting that this 57% figure might not reflect the overall reduction in burden, if for instance some of the data points cut are the more straightforward ones to collect.

Materiality assessments: This process has been somewhat streamlined, with companies now encouraged to start with the most obvious material topics, and an emphasis on a reasonable and proportionate approach to determining materiality – a bid to reduce unnecessary over-analysis, which had previously been a criticism of the process. It’s unlikely that the final version of these drafts will request that companies re-do their existing assessments, but the new rules will inform any materiality refreshes.

Language: A welcome clarification of language and concepts has taken place throughout, making the standards easier to interpret overall.

Quantification: Whether or not quantification of financial impacts, one of the most challenging parts of ESRS, will be required for material topics is explicitly undecided, with EFRAG stating that it is waiting until after the consultation to rule on this.

What does this mean for me?

A consultation is now open until the end of September, with final standards to be submitted to the EU Commission in November. The aim is for these revised standards to be in use for FY27 reporting, but the option may be included for companies to report with them from FY26.

If you’re already reporting ESRS, your FY25 reporting will not change, but you should assess these revised standards and perform a light gap analysis to judge what will change in future, which might inform where you place focus.

If you’re preparing to report ESRS, you should perform a gap analysis with these new standards to understand how your burden is likely to change. If you’re in the process of establishing systems to gather mandatory data, then we recommend you make a close assessment of these drafts to avoid working towards topics that later become unnecessary.

FCA streamlines climate reporting for regulated firms

Following a review of climate reporting, the Financial Conduct Authority (FCA) has announced an ambition to streamline its sustainability reporting rules to reduce burden on firms – which is emerging as a common theme among regulators this year.

The FCA stated that one key takeaway from the review was that detailed disclosure information was well suited for institutional investors, but the complex nature of the information made it difficult for retail investors to engage with, particularly at a product-level. Overall, the review was satisfied that reporting requirements had been successful in helping firms to consider climate change as a material risk, and in supporting the integration of climate-related risks and opportunities into strategies.

While the immediate next steps of this ‘streamlining’ haven’t been shared, the FCA will consider the outcomes of ongoing consultations on the UK SRS and transition plans. It has also updated its webpage to offer further guidance on efficient reporting under both TCFD recommendations and UK SDR (Sustainability Disclosure Requirements). The SDR is the term for the overall financial regulation framework being enacted by the FCA, which includes its fund labelling regime. We’ll be sure to keep you updated in a future Briefing.

European Commission recommends voluntary standard to ease data burden on SMEs

As part of the CSRD, large companies will be making significant requests for non-financial information from across their value chains, including from SMEs who might not have the capacity to respond to large data requests. In response, the Commission has officially recommended that SMEs consider reporting using the Voluntary standard for SMEs (VSME), developed by EFRAG, and importantly, that larger entities base their data requests on the VSME as far as possible. For companies requesting data from entities in their value chain, the VSME is therefore likely to affect the type of data you can expect to be collected and reported by smaller entities.

Finance

NZBA exodus continues, but fossil fuel finance is still declining

UBS has stepped away from the Net-Zero Banking Alliance (NZBA), joining Barclays and HSBC in the growing trend of big banks distancing themselves from collective climate commitments. Like Barclays, the Swiss lender says it’s not abandoning net zero, just choosing to go it alone, citing stronger internal capabilities that no longer align with NZBA’s framework. The exit follows the bank pushing its operational net zero target back a decade to 2035.

Despite the NZBA’s faltering, financing for oil and gas continues to fall, as Wall Street’s top six cut oil and gas funding by 25% this year – with market activity likely serving as a better indicator of direction of travel than subscriptions to climate alliances do.

For your reading list

In ‘Inside the AI race: can data centres ever truly be green?’, the FT takes an updated look at a question that’s been at the forefront of green energy for the past couple of years. It’s worth reading for insights on how Ireland’s clean energy approach is being affected by the demands of big tech.


Policy

Trump to unpick fundamental climate legislation; CDP and SBTi investigated

At the basis of US climate regulation is the 2009 ‘Endangerment Finding’ which, in ruling that greenhouse gases could cause harm, allowed for legislation from the US Environmental Protection Agency (EPA) towards mitigating climate change. The Trump administration, in keeping with its strongly anti-climate attitude, has launched a plan to undo this fundamental ruling, with the current Trump-appointed EPA administrator declaring it as potentially “the largest deregulatory action in the history of America”. As well as automatically revoking standards governing vehicle tailpipe emissions, the move would bring into legal question almost all of the EPA’s rulings on greenhouse gases and likely pave the way for more rollbacks. Another step in the administration’s climate denialism, US companies can continue to expect little to no policy support around sustainability during Trump’s term, with the political winds providing a challenging backdrop for large UK and EU companies – particularly those with US operations.

Last week Florida extended the attack to CDP (the climate reporting platform) and the Science Based Targets Initiative (SBTi), describing the important sustainability bodies as a “climate cartel” and issuing subpoenas. The organisations, perhaps bemused by the allegations, were accused of conspiring on validation of targets and reporting to create a “profit-driven feedback loop”. Aside from any assessment of the credibility of those claims, the overriding anti-ESG message remains clear.

Energy

£8bn to UK grid to support clean energy transformation

National Grid has unveiled its £8 billion Electricity Transmission Partnership (ETP), a long-term overhaul of its substation delivery model to accelerate the UK’s clean energy transition and modernise the transmission network across England and Wales. Additionally, the application window for Allocation Round 7 (AR7), the government’s offering of contracts for new renewables development, has just opened, with the approved renewables pipeline between AR7 and AR9 expected to be the largest yet. Renewables now generate over half of the UK’s electricity, with continued progress towards Clean Power 2030 and greening the grid essential to helping UK corporates meet their own net zero targets.

One Number: 167%

The percentage that the number of sustainability ratings conducted globally has increased by over the past five years. The sharp growth indicates that more companies than ever are scrutinising their risks and benchmarking performance against competitors. 

Short List

Iceland Foods

Iceland has launched a UK-wide app to give real-time alerts to shoppers for discounted items nearing their sell-by date, aiming to cut food waste and save customer money.

GSK

GSK has committed to reducing 80% of all emissions by 2030 from their 2020 baseline, the fastest rate of any large pharmaceutical company in the world.

Suntory

Suntory, the owner of Ribena, is putting nearly £1m into research to develop climate-resilient blackcurrants.

To discuss any of these topics in more detail or speak to one of our Sustainability team about how to better your corporate sustainability efforts, email [email protected] -we'd love to hear from you.