'Reaction to the revised European Sustainability Reporting Standards Exposure Draft’ 1 August 2025

Danish Institute for Human Rights welcomes that the Draft effectively responds to concerns raised by companies about the complexity of the EU’s sustainability regulation and delivers the requested simplification. Importantly, the Draft does so whilst maintaining elements of the ESRS that are critical to ensure alignment with international standards on business and human rights and responsible business conduct. This includes the double materiality approach, the synergy with sustainability due diligence, emphasis on affected stakeholders and a definition of social topics and sub-topics that is substantially aligned with human rights.

We remain concerned with a number of specific elements in the Draft and encourage stakeholders to raise these concerns in the public consultation. These include: the compounded effects of the new reporting reliefs that the Draft includes; further clarification needs related to whether companies should assess impacts before or after taking into consideration any mitigating and preventing actions as well as how positive impacts differ from and may relate to addressing negative impacts; the need to explicitly require disclosure of metrics, where material, across social standards;, and the need to improve the methodology for adequate wage assessment outside the EU. We recommend that these issues are maintained and resolved respectively in the final version of the revised ESRS, to enable the delivery of a significantly simplified reporting standard for companies, whilst still providing the infrastructure for much needed robust company disclosures on human rights impacts and due diligence efforts.