This is EFRAG’s second edition of its “State of Play” reports and it found that the broad contours of the FY2024 picture have carried forward into FY2025, in the stability of topical materiality, the structural features of sustainability statements, and the patterns observed across geographies and sectors. At the same time, the data reveals areas of active development: in the growing adoption of Climate Transition Plans, in the first systematic look at governance disclosures, and in an increasingly detailed picture of how companies are, and are not, linking material topics to measurable targets and executive incentives. Read on for some of EFRAG’s insights into the state of sustainability reporting and how it is developing.

• Cross-cutting practices: the overall materiality, structure, length and profile have not fundamentally shifted, specifically EFRAG saw:
  • 82% of companies updating their Double Materiality Assessment (“DMA”) ranging from minor refinements to scope changes, with 67% adopting a hybrid approach (combining the benefits of bottom-up and top-down approaches for different topics).
  • Most widely material standards stayed broadly the same: E1 Climate Change mitigation (99%), S1 Working conditions for own workforce (97%) and S1 Equal treatment and opportunities for own workforce (96%).
  • Companies disclosed on average 30 IROs (Impacts, Risks and Opportunities) but the highest concentration was found in E1 and S1 alone.
  • A gap between declared materiality and strategic commitment: whilst preparers identified an average of 6.4 material ESRS topics out of 10, measurable targets are set for only 3.3 of them, and fewer than two-thirds (63%) embed sustainability in executive incentive schemes.
  • Reports were generally approximately 34% of the annual reports length and only 6% included a dedicated executive summary.
• Environmental disclosures:
  • 69% of companies disclosed a transition plan for climate change mitigation, an increase from FY2024 (55%) reflecting momentum in transition planning.
  • EFRAG analysed climate target-setting finding that 57% of all undertakings disclose near- and long-term targets compatible with limiting global warming to 1.5°C.
  • Beyond climate, the materiality of non-climate environmental topics is rising slightly with E2 up from 38% to 42%, E3 and E4 up to 35% and 41% respectively, and E5 following the same upward trends at 67%. But when a like-for-like comparison was made only modest increases were found.
  • An analysis of metrics disaggregation under E2 to E5, where E2-E5 are material, found more than two-thirds of companies report exclusively at the global, company-wide level, less than 10% at regional level, and site level is applicable mostly for E2 Pollution, E3 Water and E4 Biodiversity (25%).
• Social disclosures: there was no significant change in social topic materiality in FY2025 compared with FY2024. S1 uptake was stable (at 99%), S2 up to 69% from 65%, S3 up to 34% from 30% and S4 up to 69% from 67%. EFRAG also found that although a persistent gender pay gap was reported, with the widest gaps in the financial sector, only 12% of companies had enriched their unadjusted pay gap figure to better account for the peculiarities of their workforce.
• Governance: for the first time EFRAG looked at business conduct disclosures finding a slight increase in materiality in this area with supplier relationship management, including payment practices, material for 54% of the undertakings vs. 50% in FY2024 (when adjusted like-for like it showed a higher increase 49% to 58%).

EFRAG’s State of Play Report 2026 gives an indication of how peers are reporting under CSRD and how reports are developing over time.

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This note is intended to be a general guide to the latest ESG developments. It does not constitute legal advice.

Authored by Emily Julier and Rita Hunter.