IOGP Europe response to the European Commission’s consultation on the revised Sector Agnostic ESRS

Executive Summary

IOGP Europe welcomes the progress made by the European Commission in the revised draft Sector-Agnostic European Sustainability Reporting Standards (ESRS) published as part of the Omnibus I simplification package.

Compared to the November 2025 technical advice on draft simplified ESRS developed by EFRAG to the European Commission, the revised draft ESRS introduces several meaningful improvements that move the framework in a more proportionate, operable and decision-useful direction. The revised draft ESRS:

• strengthens the application of materiality and proportionality;
• recognizes more clearly top-down materiality assessment approaches;
• improves the operability of aggregation and disaggregation requirements;
• introduces more robust value chain feasibility safeguards;
• enhances flexibility in the application of GHG accounting boundaries;
• narrows pollutant scoping expectations
• removes secondary microplastics disclosure requirements; and
• introduces additional reliefs and phase-ins intended to reduce implementation burden.

These are important and constructive developments that must be preserved during the finalization of the Delegated Act.

At the same time, several core challenges remain only partially addressed.

While the revised draft reduces certain procedural complexities, it does not yet significantly reduce reporting burden, assurance exposure or legal uncertainty for companies operating within high capital-intensive sectors with complex, interdependent value chains, such as oil and gas. In particular:

• Fair presentation remains a binding overarching concept that risks reopening materiality and scoping decisions during assurance.
• Mandatory anticipated financial effects and CapEx and OpEx disclosures continue to require finance-grade analysis that cannot be consistently assured.
• There is no Tier 1 default for value chain scoping which leaves scope for expansive multi-tier expectations to develop over time.

Certain climate-related reporting requirements, including climate scenario assumptions and GHG accounting methodologies, together with Substances of Concern and human rights reporting provisions, continue to create operational uncertainty and inconsistencies with other frameworks.

Simplification should therefore be assessed not only by reductions in datapoints, but by whether the revised standards produce meaningful and durable reductions in implementation burden, assurance complexity and legal uncertainty.

IOGP Europe encourages the Commission to preserve the improvements already made while introducing further targeted refinements before adoption of the Delegated Act.

Recommendations

IOGP Europe calls on the Commission to:

• Preserve the positive developments made in the revised draft ESRS, particularly on materiality, proportionality, value chain feasibility, reliefs with no time limits, GHG accounting flexibility, pollutant scoping and removal of secondary microplastics.

1. Confirm that proportionality mechanisms and reliefs are intended to operate as ongoing feasibility safeguards and cannot be progressively narrowed through assurance or supervisory interpretation.
2. Make the application of fair presentation If retained, clarify that fair presentation does not constitute a separate assurance test beyond compliance with ESRS requirements and cannot be used to reopen materiality or scoping decisions.
3. Confirm that disaggregation is required only where it demonstrably enhances user understanding and does not override materiality conclusions reached through a proportionate top-down approach.
4. Clarify that value chain scoping defaults to direct (Tier 1) business relationships, with higher-tier assessment required only where impacts are demonstrably material, in line with the risk-based approach in CSDDD.
5. Remove mandatory anticipated financial effects disclosures or, at a minimum, reduce them to voluntary qualitative information.
6. Limit Capex and Opex disclosures to high level narrative, avoiding quantified financial allocation unless already produced for financial reporting purposes.
7. Ensure greater consistency and precision in terminology.
8. Align ESRS human rights frameworks references more closely with internationally recognized business-focused frameworks, including the UN Guiding Principles on Business and Human Rights.
9. Remove references to 1.5°C scenarios with “no or limited overshoot” in ESRS E1.
10. Confirm that ESRS E1 defers to the GHG Protocol in cases of methodological conflict that operational control and equity share approaches remain fully aligned with the GHG Protocol without additional ESRS-specific modifications, thereby avoiding the need for parallel emissions inventories for EU reporting purposes.
11. Introduce explicit pollutant-scoping safe harbors allowing reliance on permitting and compliance data, clarify that pollutant scoping may be conducted centrally and on an activity basis, and confirm that transfers of pollutants to authorized external treatment facilities do not create additional value chain reporting obligations.
12. Remove Substances of Concern and limit mandatory substance disclosures to SVHCs under REACH.
13. Further clarify the application of the “substantiated” threshold and severity assessment for human rights incidents and align more closely with the EU Taxonomy approach focusing on established liability, and ensure closer alignment with internationally recognized human rights due diligence frameworks, including the UN Guiding Principles on Business and Human Rights.

For more information, download the full document to read the detailed rationale for our recommendations.