Norges Bank Investment Management (NBIM), the investment manager for Norway’s $2 trillion oil fund issued a response to the European Commission’s consultation on the revised European Sustainability Reporting Standards (ESRS), including calling on the Commissions to allow companies to meet the requirements of both the ESRS and ISSB standards in a single report.
According to NBIM, the closer alignment of the standards would enable investors to more easily compare sustainability information between companies in different jurisdictions, and allow companies to avoid dual reporting, supporting the EU’s simplification agenda to reduce costs and burden on companies.
The EU Commission’s consultation follows its release last month of the new draft ESRS, one of the final major steps in the Commission’s initiative to simplify sustainability reporting requirements for companies under its Omnibus I initiative, launched early last year.
The Omnibus package, approved by EU lawmakers earlier this year, dramatically reduced the number of companies covered by the EU’s mandatory Corporate Sustainability Reporting Directive (CSRD) by 90% by removing companies with less than €450 million in revenue and 1,000 employees, compared to the prior 250 employee threshold.
In addition to dramatically reducing the number of companies included within the scope of the EU’s mandatory Corporate Sustainability Reporting Directive (CSRD), the Omnibus initiative also sought to significantly simplify and scale back sustainability reporting requirements for those remaining through the introduction of a revised ESRS. The revised ESRS are based on technical advice prepared by the European Financial Reporting Advisory Group (EFRAG). EFRAG submitted its finalized proposed revision of the ESRS in December 2025, with key changes including a reduction in mandatory datapoints of 61%, and the elimination all voluntary disclosures, resulting in a total datapoint reduction of over 70%.
While supporting the Commission’s efforts to simplify the ESRS, in its consultation response, NBIM urged the Commission to go further in aligning the standards with the ISSB standards.
The IFRS Foundation’s International Sustainability Standards Board (ISSB) released its inaugural general sustainability (IFRS S1) and climate (IFRS S2) reporting standards in June 2023, with a focus on providing investors with material financial information about companies’ sustainability-related risks and opportunities.
NBIM noted that the ISSB standards “have become the global baseline for sustainability reporting,” with adoption to date by 42 jurisdictions, representing roughly 60% of global GDP.
Prior to the Commission’s release of the draft ESRS last month, media reports had indicated that the Commission had considered introducing much closer alignment with the IFRS Foundation’s ISSB standards, leading to warnings that the revision could have diminished the prominence of the European standard’s “double materiality” approach which focuses reporting both on the risks and impact of sustainability issues on an enterprise, as well as on the enterprises’ impacts on environment and society.
In its response, NBIM noted that the IFRS Foundation’s standards enables jurisdictions to adopt the ISSB while “adding requirements suited to their broader sustainability ambitions. “
NBIM said:
“Were the EU to build on the ISSB model, it could continue to pursue its double materiality objectives while keeping the financially material information investors need comparable across frameworks.”
Among the key specific recommendations included in NBIM’s response is for the introduction of two targeted technical amendments that would allow companies to meet the requirements of both the ESRS and ISSB standards through a single report. The amendments would include a “non-obscuring principle” that would require investor-relevant information within a sustainability statement to be clearly identifiable and not obscured by disclosures directed at other audiences, and a “flexibility in presentation format” giving companies the option to present disclosures in a way that facilitates compliance with both frameworks.
Additional recommendations made in the NBIM response included avoiding new amendments in the revised ESRS that reduce interoperability with ISSB standards, referencing IFRS industry-based guidance – which incorporates the sector-focused Sustainability Accounting Standards Board (SASB) Standards – in the ESRS double materiality assessment to strengthen industry-specific financial materiality alignment with ISSB Standards, and working with the ISSB as it develops its nature-related disclosure practice statement to support convergence between European and global approaches.
In a post announcing the response, Carine Smith Ihenacho, Chief Governance and Compliance Officer at NBIM, said:
“The draft is a step forward but true simplification means one report, not two. That means aligning European standards with the International Sustainability Standards Board (ISSB) Board Standards, the global baseline adopted in over 40 countries. We believe a few targeted reforms can deliver this and companies, investors and European capital markets all stand to gain.”
