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The newly released European Sustainability Reporting Standards (ESRS) are a distinctively holistic legal instrument designed to enhance the disclosure of the sustainability performance of companies across the European Union (EU). However, there is currently a lack of evidence as what the standards are and how prepared companies are to comply with the ESRS. Through an analysis of secondary sources for 20 EU companies, this study therefore aimed to identify the preparedness of EU-based companies. Results indicate that there is substantial variation in preparedness; larger firms exhibit higher levels of alignment with the ESRS, whereas small and medium-sized enterprises (SMEs) struggle with resource limitations and insufficient external support. This timely and unique study contributes novel insights into the variable preparedness of companies transitioning to new, EU-wide compliance standards, and the factors involved in large-scale implementation. Such insights provide direct implications for regional-level policy implementation. • The European Sustainability Reporting Standards (ESRS) aim to standardise sustainability reporting across the EU. • Summary of the standards and requirements. • Highly uneven preparedness of EU companies to implement the ESRS. • Reputational aspects are variably a driver for organisational engagement. • Recommend targeted policy support and guidance for stronger compliance, and to embed longer-term, integrated planning.
Filho et al. (Tue,) studied this question.