NBIM urges EU reporting changes to prevent duplicate sustainability disclosures

Companies should be able to build on their existing sustainability reporting when meeting new EU requirements, according to Norges Bank Investment Management (NBIM). But restrictions in the proposed rules could force some companies to duplicate their reporting, it has warned.

The manager of Norway’s sovereign wealth fund has urged the European Financial Reporting Advisory Group (EFRAG), which develops the European Sustainability Reporting Standards (ESRS), to make it easier for non-EU groups to reuse disclosures prepared under International Sustainability Standards Board (ISSB) standards.

Many of NBIM’s largest holdings are non-EU groups already using, or moving towards, ISSB reporting.

The intervention follows warnings from NBIM and other pension investors in March that insufficient alignment between global and European reporting standards could increase costs.

Overlapping requirements

EFRAG’s consultation on ESRS-40a, the proposed standards for non-EU groups with significant EU operations, closed on 31 October 2026. The first reports are expected in 2029, covering the 2028 financial year.

The framework stems from the EU’s Corporate Sustainability Reporting Directive (CSRD). It aims to improve transparency around these groups’ impacts on people and the environment and ensure a level playing field with EU businesses.

Unlike the standards for EU companies, ESRS-40a focuses on impacts alone. ISSB standards, meanwhile, address sustainability-related financial risks and opportunities. However, there is considerable overlap between the frameworks, particularly on climate.

EFRAG raised concerns in April about the ISSB’s growing reliance on industry-specific SASB metrics, highlighting uncertainty over how the global framework would interact with European requirements.

The consultation sought views on how the requirements should work together, alongside questions about adapting existing standards and allowing some disclosures to cover only EU-related impacts.

Reusing existing reports

In its response, dated 30 October, NBIM backed allowing companies to build on ISSB reporting and add the impact disclosures required under the EU framework.

However, it wants this flexibility extended to voluntary reports, which the draft excludes from incorporation by reference. It also wants overlapping ISSB disclosures to be accepted unchanged.

NBIM also challenged the proposed labelling requirements, saying these “would add work for companies without making the report more useful to investors or other readers”.

The letter was signed by chief governance and compliance officer Carine Smith Ihenacho and senior policy adviser Shilpi Nanda.

NBIM urged EFRAG to widen the range of reports companies can build on, make assurance levels visible, allow ISSB disclosures to be used unchanged and simplify how information under ESRS-40a is identified.

The concerns extend beyond reporting costs. NBIM warned that duplicate or inconsistent disclosures could make companies harder for investors to compare.

NBIM also joined investor bodies in June in opposing proposed changes to financial disclosures under the ESRS, arguing that investors needed information about companies’ exposure to sustainability risks.

“We believe that allowing companies to build efficiently on their ISSB reporting, while keeping the resulting report understandable for investors, would best serve both investors and companies,” said Smith Ihenacho and Nanda.