Navigating the EFRAG State of Play 2025

“Sustainability reporting is no longer just compliance; it is a strategic pillar for building trust, resilience, and competitive advantage.”

In 2025, the sustainability reporting ecosystem in Europe reached a watershed moment with the first mandatory disclosures under the Corporate Sustainability Reporting Directive (CSRD). The European Financial Reporting Advisory Group (EFRAG) published its comprehensive State of Play 2025 report, revealing how companies are implementing the European Sustainability Reporting Standards (ESRS) and disclosing sustainability information aligned with the directive (1).

This article dives deep into the key findings from that report, enriched with strategic insights inspired by Nexio Projects’ guide on credible and impactful sustainability reporting.

Context and scope of the EFRAG State of Play

The EFRAG State of Play 2025 report analyses sustainability statements published by 656 companies, mainly large undertakings and public-interest entities across the EU, reporting on fiscal year 2024 data. It reflects the early implementation phase of ESRS, focusing mostly on the first wave of mandatory reporters (Wave 1), such as listed companies with over 500 employees or €40 million in turnover. The report highlights emerging trends in disclosure practices, observed challenges, and regional and sectoral differences in uptake, while signalling areas for enhanced consistency and comparability (1).

Length and structure of sustainability reports

One striking observation is the considerable variation in sustainability statement length and style (1):

• The average report length is approximately 115 pages, with the median at 100 pages. Lengths range widely from 25 pages to an extensive 440 pages.
• Financial institutions tend to produce longer reports (average 140 pages) compared to non-financial companies (average 110 pages).
• Regional styles influence length: southern European companies, particularly from Spain and Italy, have longer reports, contrasting with typically shorter reports from Nordic countries like Sweden and Denmark.

Despite this variability, all reports consistently follow the ESRS framework’s structure, covering General Disclosures and Environmental, Social, and Governance (ESG) topical standards (1). However, granular disclosures — such as tables of specific datapoints and transition plans — show a wide diversity in format and depth across companies.

Materiality assessment and topical standards

Materiality, a core principle underpinning meaningful sustainability disclosures, varies widely among companies (1):

• Most companies apply six out of the ten topical standards on average, with a smaller share selecting all ten. A quarter of companies focus on four or fewer.
• The three most commonly material standards are overwhelmingly consistent:
• Climate Change (E1) at 98%
• Own Workforce (S1) at 99%
• Business Conduct (G1) at 93%

Other frequently material topics encompass Circular Economy (E5) (65%), Workers in the Value Chain (S2) (63%), and Consumers and End-users (S4) (68%) (1).

Less than 5% of companies identified materiality in sub-topics like microplastics, pollution of living organisms, or rights of indigenous peoples, underscoring nascent disclosure in these areas.

Materiality assessments also reflect sectoral and regional characteristics, with non-financial companies engaging broader material topics compared to financial institutions, which tend to report on fewer issues (1).

Stakeholder engagement and double materiality

A vital aspect of CSRD-aligned reporting is the double materiality assessment (DMA), which evaluates impacts both financially material to the company and significant to external stakeholders. Almost all reporters engage internal stakeholders (97%), primarily employees, complemented by consultations with clients (~70%), suppliers (~65%), and investors (~60%) (1). Broader societal stakeholder engagement remains limited, with less than a third engaging NGOs, communities, or trade unions regularly (1).

Companies that successfully balance business-related and societal stakeholder input demonstrate more robust and transparent assessments, which enhances reporting credibility and relevance (1).

Climate change transition plans and environmental metrics

Transition planning is an essential but still maturing area of reporting (1):

Internal carbon pricing (ICP) mechanisms are still emerging, with only 20% adoption overall but higher prevalence in carbon-intensive sectors such as mining (60%), electricity (50%), and transport (30%) (1).

Meanwhile, although biodiversity disclosure is gaining ground (~30% of companies disclose biodiversity metrics), uptake remains uneven across sectors and geographies (1).

Social standards: Wages, human rights and workforce disclosure

Social disclosures present important insights into workforce conditions and human rights:

• Adequate wages appear widely provided, with 93% of companies declaring compliance with minimum wage requirements in the European Economic Area.
• Discrimination incidents are disclosed by 81% of companies surveyed, while only 5% report severe human rights violations in their operations.
• Disclosures on workers in the value chain show growing but limited maturity in addressing severe human rights incidents beyond direct operations.

Companies are linking policies, actions, and targets more clearly, particularly in areas such as health and safety, remuneration, and diversity, equity & inclusion (1).

Governance and value chain risk assessments

Companies are increasingly mapping Impacts, Risks, and Opportunities (IROs) across their full value chain, incorporating both upstream suppliers and downstream customers. This holistic perspective aids in identifying financial and impact materiality with greater precision (1).

Moreover, some companies quantify the financial effects of climate-related risks on assets and revenues, moving beyond narrative descriptions toward more decision-useful, quantified disclosures (1).

Strategic reporting lessons from Nexio Projects

Drawing on Nexio Projects’ strategic guide, the evolving sustainability reporting landscape demands:

• Clear narrative linking policies, actions, and performance metrics to tell a coherent story of corporate sustainability strategy.
• Rigorous double materiality reporting engaging diverse stakeholder groups.

• Transparent, verifiable data that enables comparability and informed decision-making.
• Integration of entity-specific metrics alongside standard disclosures to reflect unique business risks and opportunities.
• Ongoing simplification efforts as seen in the EU “Omnibus” reforms to balance regulatory rigour with reporting efficiency.

Download our reporting guide for an overview of current reporting standards and their tie to one another.

The EFRAG State of Play 2025 report marks a major advancement in Europe’s sustainability reporting journey, highlighting both early successes and persistent challenges. Companies that embrace the comprehensive ESRS framework while adopting strategic, transparent, and stakeholder-inclusive reporting practices will position themselves as leaders in sustainable business (1).

Our added value

Nexio Projects is your trusted partner for ESG reporting services and sustainability advisory, helping organisations transform complex regulatory requirements into clear, actionable insights. As a leading ESG reporting consultancy, we support businesses in building credible, transparent, and compliant disclosures aligned with CSRD, ESRS, and global frameworks.

Recognised by Verdantix as one of the world’s top 10 boutique ESG and sustainability strategy consultancies, Nexio Projects combines deep ESG advisory expertise with hands-on implementation support — guiding you from data collection to impactful reporting that strengthens stakeholder trust and drives long-term value.

We invite organisations to harness these insights and elevate their ESG disclosures through tailored advisory, data tools, and implementation strategies designed to meet today’s regulatory demands and tomorrow’s market expectations.

For a deeper dive and personalised guidance on navigating the CSRD reporting and ESRS implementation, contact Nexio Projects and explore our latest resources on sustainability reporting excellence.

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Reference

1. European Financial Reporting Advisory Group (EFRAG) (2025) EFRAG State of Play 2025 Report. Brussels: EFRAG. Available at: https://www.efrag.org/sites/default/files/media/document/2025-07/EFRAG_State%20of%20Play%202025%20Report_0.pdf (Accessed: 7 October 2025).