Comparison of Significant Sustainability-Related Reporting Requirements

Eric Knachel, Laura McCracken, and Kristen Sullivan are Partners at Deloitte LLP. This post is based on a Deloitte memorandum by Mr. Knachel, Ms. McCracken, Ms. Sullivan, Mark Strassler, Cody Yettaw, and David Wrobbel.

Background

After many years of voluntary reporting, various regulators and standard setters around the world have established requirements for disclosures of certain sustainability-related information. The most significant sustainability-related reporting regulations and standards are those established by the SEC and the state of California[1] in the United States, the European Union via the Corporate Sustainability Reporting Directive (CSRD), and the International Sustainability Standards Board (ISSB) within the IFRS Foundation. The landscape is evolving rapidly, as highlighted by the SEC’s recent withdrawal of its legal defense for its currently stayed climate rule and the European Commission’s (EC’s) proposed omnibus initiative that will delay and potentially modify certain reporting requirements of the CSRD and other E.U. sustainability reporting regulations.

This publication summarizes and compares the key sustainability-related requirements issued by those bodies. It is intended to help U.S.-based entities that might have to report under more than one regulatory framework as well as entities that were preparing to adopt the SEC’s climate disclosure rule or the CSRD and want to understand how to leverage such preparation when applying other sustainability requirements (e.g., those issued by the state of California or the ISSB). The complete requirements of each body are not summarized or analyzed; instead, this publication focuses on key similarities and differences between them. Note that although the disclosure requirements under various frameworks may overlap, the information an entity provides under one set of regulations may not necessarily be accepted as sufficient by other regulators. Thus, an entity should assess whether it has met the specific obligations of every framework under which it is required to report. In addition, certain standard setters have issued guidance to help entities prepare disclosures under multiple frameworks. For example, the interoperability guidance issued jointly by the ISSB, EC, and EFRAG summarizes interactions between the CSRD’s and ISSB’s requirements, although this guidance may need to be updated as a result of changes to the CSRD made by the EC’s proposed omnibus legislation (see the CSRD Requirements section below). For links to Deloitte publications that discuss these frameworks in greater detail, see the Other Resources section.

Overview of Sustainability-Related Reporting Regulations and Standards

The SEC’s climate disclosure rule, California’s climate legislation, the CSRD, and the ISSB standards (collectively, the “regulations and standards”) are briefly summarized below. These regulations and standards have incorporated, to varying degrees, the work of the Task Force on Climate-Related Financial Disclosures (TCFD),[2] whose recommendations were widely used for voluntary reporting on climate-related risks and opportunities. The TCFD recommendations are organized into four core elements: (1) governance, (2) strategy, (3) risk management, and (4) metrics and targets. The regulations and standards addressed in this publication reflect disclosure requirements related to these four core elements. For reporting of greenhouse gas (GHG) emissions, each regulator and standard setter refers to the GHG Protocol, which provides broadly applied standards and guidance on the disclosure of such emissions.

SEC Climate Disclosure Rule

On March 6, 2024, the SEC issued a final rule [3] that requires registrants to provide climate disclosures, both within and outside the financial statements, in their annual reports and registration statements, including those for initial public offerings. However, on April 4, 2024, the SEC voluntarily stayed the effective date of the final rule pending judicial review by the Eighth Circuit Court of Appeals of petitions challenging it. On March 27, 2025, the SEC voted to withdraw its legal defense of the final rule. On April 24, 2025, the court issued an order pausing the case and instructed the SEC to provide a status report within 90 days indicating whether it intends to review or reconsider the rule. At the time of this writing, it is uncertain how the litigation will move forward or whether the SEC will amend or repeal the rule. However, it is unlikely that the final rule will continue in its current form even if the court upholds it or the litigation is dropped given that (1) the current SEC chairman co-authored an opinion piece in 2022 questioning the final rule’s legality and (2) two of the three other current SEC commissioners voted against issuing the final rule.

California Climate Legislation

On October 7, 2023, California Governor Gavin Newsom signed into law two state senate bills and one state assembly bill that collectively require certain public and private U.S. entities that perform various business activities in California to provide disclosures about their GHG emissions, climate-related financial risks, voluntary carbon offsets (VCOs), [4]and specified climate-related emission claims. The two state senate bills, SB-253 [5] and SB-261,[6] establish industry-agnostic U.S. regulations that mandate the corporate reporting of GHG emissions and climate risks in the United States. Certain requirements of those bills were subsequently amended by SB-219,[7] which was signed into law on September 27, 2024. This publication summarizes the key requirements of SB-253 and SB-261, as amended by SB-219.

The state assembly bill, AB-1305,[8] establishes requirements for both U.S. and international entities that market or sell VCOs within California as well as entities that operate in California and make certain climate-related emission claims (whether or not they purchase or use VCOs). The requirements of AB-1305 are not comparable to the other regulations and standards addressed in this publication and are therefore not included in the comparison summary below. For links to Deloitte publications that discuss AB-1305, see the Other Resources section.

CSRD Requirements

The Council of the European Union adopted the CSRD,[9] effective January 2023, to support the European Green Deal — a package of initiatives to cut GHG emissions, direct investment toward sustainability initiatives, invest in research and innovation, and preserve Europe’s natural environment. Each E.U. member state was required to incorporate the CSRD into its national laws and establish regulations and administrative provisions necessary for compliance with it by July 2024. However, as of the date of this publication, not all E.U. member states have completed this process. Upon adoption of the CSRD, E.U. member states are able to include certain additional local requirements.

The CSRD requires entities to report under the European Sustainability Reporting Standards [10] (ESRS), which were adopted by the EC in July 2023 and published in the Official Journal of the European Union in December 2023. Drafted by EFRAG, the ESRS must be applied by entities within the CSRD’s scope.[11]

On February 26, 2025, the EC published its proposed omnibus legislation package that aims to significantly reduce the sustainability reporting and due diligence requirements for entities that are currently within the scope of the CSRD, the E.U. taxonomy (EUT),[12]and the Corporate Sustainability Due Diligence Directive (CSDDD). Specifically, the EC published:

Omnibus I — COM(2025) 80 [13] (“Omnibus I”), which postpones (1) the application of the reporting requirements in the CSRD for waves 2 and 3 (see the effective date discussion for the CSRD below) by two years and (2) the transposition deadline and application of the CSDDD. Omnibus I became effective on April 17, 2025, and E.U. member states must incorporate its requirements into their national laws by December 31, 2025.
Omnibus I — COM(2025) 81 [14](“Omnibus II”), which would modify the scope and reporting requirements of the CSRD, EUT, and CSDDD. Omnibus II content changes are currently undergoing public consultation related to potential revisions and will be submitted to the European Parliament and the EC in accordance with the European Union’s regular legislative process, with no set date for completion at this time.

The Detailed Comparison section below includes discussion of the CSRD’s original requirements as well as known key changes that would be made under the omnibus legislation. See Deloitte’s March 7, 2025, Heads Up for additional information about the omnibus legislation, and stay tuned for further updates.

ISSB Standards

The IFRS Foundation established the ISSB to develop consistent and comparable disclosure requirements that can enhance the decision-usefulness of sustainability information for investors as well as to improve the alignment and interoperability of global climate-related guidance by reducing the reporting burden for preparers. In June 2023, the ISSB issued its first two standards, IFRS S1 [15]and IFRS S2.[16]The ISSB reported in May 2024 that “[j]urisdictions representing over half the global economy by gross domestic product (GDP) have announced steps to use the [ISSB standards] or to fully align their sustainability disclosure standards with those of the ISSB.” These jurisdictions include Australia, China, Brazil, Canada, Japan, Mexico, and the United Kingdom, among others. In a July 2023 media release, the International Organization of Securities Commissions endorsed the ISSB standards and encouraged its member jurisdictions — which regulate more than 95 percent of the world’s financial markets — to consider how they “might adopt, apply or otherwise be informed by the ISSB standards within the context of their jurisdictional arrangements.” The IFRS Foundation maintains a list of open and completed jurisdictional sustainability consultations to track jurisdictional progress toward adoption. Deloitte also maintains an ISSB adoption tracker.

See the rest of the report here.

1 Other U.S. states are also considering legislation that would require entities to provide sustainability-related disclosures. (go back)

2 Having fulfilled its mission, the TCFD disbanded on October 12, 2023. The Financial Stability Board transferred responsibility for monitoring climate-related disclosure progress from the TCFD to the IFRS Foundation from 2024 onward. (go back)

3 SEC Final Rule Release No. 33-11275, The Enhancement and Standardization of Climate-Related Disclosures for Investors. (go back)

4 The state assembly bill defines a VCO as “any product sold or marketed in the state that claims to be a ‘greenhouse gas emissions offset,’ a ‘voluntary emissions reduction,’ a ‘retail offset,’ or any like term, that connotes that the product represents or corresponds to a reduction in the amount of greenhouse gases present in the atmosphere or that prevents the emission of greenhouse gases into the atmosphere that would have otherwise been emitted.” (go back)

5 SB-253, Climate Corporate Data Accountability Act. (go back)

6 SB-261, Greenhouse Gases: Climate-Related Financial Risk. (go back)

7 SB-219, Greenhouse Gases: Climate Corporate Accountability: Climate-Related Financial Risk. (go back)

8 AB-1305, Voluntary Carbon Market Disclosures. (go back)

9 Directive (EU) 2022/2464 of the European Parliament and of the Council. (go back)

10 Commission Delegated Regulation (EU) 2023/2772 of 31 July 2023 Supplementing Directive 2013/34/EU of the European Parliament and of the Council as Regards Sustainability Reporting Standards. (go back)

11 The CSRD also allows for reporting under standards deemed to be equivalent by the EC; however, as of the date of this publication, no other standards have been deemed equivalent. In addition, specific ESRS are expected to be adopted by the EC for voluntary sustainability reporting for small and medium-sized entities (SMEs) and non-E.U. entities. (go back)

12 Regulation (EU) 2020/852 of the European Parliament and of the Council of 18 June 2020 on the Establishment of a Framework to Facilitate Sustainable Investment, and Amending Regulation (EU) 2019/2088. (go back)

13 Directive (EU) 2025/794 of the European Parliament and of the Council of 14 April 2025 Amending Directives (EU) 2022/2464 and (EU) 2024/1760 as Regards the Dates From Which Member States Are to Apply Certain Corporate Sustainability Reporting and Due Diligence Requirements. (go back)

14 Proposal for a Directive of the European Parliament and of the Council Amending Directives 2006/43/EC, 2013/34/EU, (EU) 2022/2464 and (EU) 2024/1760 as Regards Certain Corporate Sustainability Reporting and Due Diligence Requirements. (go back)

15 IFRS S1, General Requirements for Disclosure of Sustainability-Related Financial Information. (go back)

16 IFRS S2, Climate-Related Disclosures. (go back)

Distribution channels: Education

Legal Disclaimer:

EIN Presswire provides this news content "as is" without warranty of any kind. We do not accept any responsibility or liability for the accuracy, content, images, videos, licenses, completeness, legality, or reliability of the information contained in this article. If you have any complaints or copyright issues related to this article, kindly contact the author above.

Submit your press release