Other Notable Developments

Singapore’s Carbon Credits Guidance: On June 20, Singapore’s National Climate Change Secretariat, Ministry of Trade and Industry, and Enterprise Singapore issued draft guidance on using carbon credits as part of a “credible” decarbonization plan. The draft is open for comment until July 20.

UK: Government Publishes Draft Sustainability Reporting Standards

On June 25, 2025, the UK government published two draft Sustainability Reporting Standards (the “SRS”) based on the International Sustainability Standards Board (the “ISSB”) standards, IFRS S1 (on general requirements for disclosure of sustainability information) and IFRS S2 (on climate-related disclosures).

The UK government highlighted that the SRS diverge from the ISSB standards in six ways, designed to make the ISSB standards applicable in a UK context. The amendments include:

• removing the transition relief in IFRS S1 that allows companies to delay reporting by one year;

• extending the transition relief in IFRS S1 that allows companies to only disclose climate-related risks and opportunities from the first year to the first two years of reporting;

• clarifying that any transition relief under IFRS S1 and S2 should apply from the date when mandatory reporting is introduced, instead of the date when a company begins to voluntarily report under the SRS; and

• clarifying that reporting companies may, but are not required to, use the separate Sustainability Accounting Standards Board standards when reporting on wider sustainability-related risks and opportunities affecting them.

The SRS are open for public consultation until September 17, 2025. The government will thereafter decide whether to endorse the SRS. If it does, the government intends to publish the final SRS in the third quarter of 2025.

The consultation process will inform the government’s decision whether to make the SRS mandatory and whether the SRS will apply to “economically-significant companies that are outside the FCA’s [the UK’s financial regulator] regulatory perimeter”. Subject to the government’s final endorsement of the SRS, the FCA has also announced that it will consult on updating its reporting rules for listed companies, currently based on the Taskforce for Climate-related Financial Disclosures standards, to instead be based on the SRS.

Links:

Draft SRS

Consultation


EU: Council Reaches Agreement on Omnibus Amendments to Sustainability Reporting and Due Diligence Requirements

On June 23, 2025, the Council of the European Union (the “Council”) agreed its position on the Omnibus proposal to simplify the Corporate Sustainability Reporting Directive (“CSRD”) and Corporate Sustainability Due Diligence Directive (“CSDDD”) in an effort to boost EU competitiveness.

The Council’s proposed amendments to CSRD include a higher scoping threshold, applying to companies with more than 1,000 employees (an increase from 250 employees) and a net turnover of over €450 million (an increase from €50 million).

The Council also proposed raising the scoping threshold for CSDDD to companies with more than 5,000 employees (from 1,000 employees) and €1.5 billion net turnover (from €450 million). The proposal also limits the requirement to conduct due diligence on a company’s own operations, as well as those of its subsidiaries and direct partners; companies would be allowed to take a risk-based approach to due diligence, focusing on areas where adverse impacts are most likely to occur. The proposal also simplifies transition plans for climate change mitigation, proposes to remove the EU harmonized liability regime, and postpones the transposition deadline of the CSDDD by one year to July 26, 2028.

The Council’s position differs from that of the European Parliament Rapporteur Jörgen Warborn (summarized here) and of the European Commission (summarized here). The European Parliament will begin debating the amendments on July 15. Once the Parliament agrees its negotiating position, the Council, Parliament and Commission will commence informal trilogue negotiations to reach a final agreement. 

Link:

Press Release


EU: EFRAG Delivers ESRS Simplification Progress Report

On June 20, 2025, the European Financial Reporting Advisory Group (“EFRAG”) released a Progress Report on its work to revise the European Sustainability Reporting Standards (the “ESRS”). The report responds to a request by the European Commission that EFRAG provide an update on planned modifications of the ESRS in connection with the Omnibus package of climate disclosure simplification proposals published by the Commission in February. For more on the Omnibus proposal, see our Debevoise In Depth here.

The Progress Report outlines EFRAG’s plan to reduce the number of datapoints required for compliance with the Corporate Sustainability Reporting Directive (“CSRD”) by more than half in its upcoming ESRS revision. The report includes a series of key levers that EFRAG is pursuing in its efforts to simplify the ESRS, including simplifying the process of the double materiality assessment, enabling better readability and conciseness of sustainability statements, and improving the clarity of the standards. EFRAG also noted that it will seek to enhance interoperability between the ESRS and the IFRS sustainability standards. For more on the IFRS standards, see our previous ESG Update here.

The proposed modifications of the ESRS reflect the larger efforts of the European Commission to reduce sustainability reporting burdens on companies. The planned revisions to the ESRS will promote a less granular approach to the narrative disclosures by eliminating datapoints that are not strictly necessary to meet the CSRD disclosure objectives. While the changes are intended to simplify reporting requirements, EFRAG’s report notes that the revisions will preserve the integrity of the core objectives of CSRD.

EFRAG’s deadline to deliver its recommended ESRS modifications to the Commission is October 31, 2025.

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