ESMA’s 2025 Corporate Reporting Priorities – 5 Things You Need to Know

IFRS Financial Reporting: Strengthening Transparency

The International Financial Reporting Standards (IFRS) are a globally recognized set of guidelines that ensure consistency and comparability in financial statements. Over 140 jurisdictions, including the EU, rely on these standards to inform investment decisions.

ESMA has highlighted three key areas for 2025:

• Liquidity disclosures Companies must provide detailed information on supplier finance arrangements (SFA) under IAS 7, including terms, conditions, and liquidity impacts.
• Covenants : Issuers are expected to offer clear disclosures about compliance risks tied to financial covenants under IAS 1.
• Accounting policies and judgements: ESMA wants to move away from generic, boilerplate notes. Disclosures must be entity-specific and reflect the judgments that matter most to stakeholders.

Takeaway : Precision and transparency are critical. Focus on clear, meaningful disclosures that highlight liquidity risks, covenant compliance, and material accounting judgments.

Sustainability Reporting: Aligning with ESRS

The European Sustainability Reporting Standards (ESRS) are reshaping how companies disclose non-financial information, with an emphasis on dual materiality — capturing both financial and broader societal impacts.

ESMA’s focus includes:

• Materiality assessments : Companies must explain how they determine what’s material, including processes for stakeholder engagement and sustainability due diligence.
• Structure and scope : Sustainability statements must align with financial reporting, ensuring the same consolidation boundaries and clear connections across reports.
• Taxonomy regulation (Article 8) : Companies must use standardized templates to disclose environmental objectives, ensuring comparability and alignment with EU taxonomy requirements.

Takeaway : Invest in governance and materiality processes. Use standardized templates to simplify compliance and support robust sustainability disclosures.

ESEF Digital Reporting: Getting it Right

Digital reporting under the European Single Electronic Format (ESEF) offers significant opportunities for transparency, but accuracy and consistency are crucial.

ESMA’s 2025 priorities include:

• Tagging accuracy : Choose the correct taxonomy elements and anchor them properly to avoid misrepresentation.
• Consistency : Align mark-ups between financial statements and their notes.
• Readability : Focus on improving block mark-ups for narrative disclosures to enhance usability for stakeholders and machines alike.
• Takeaway: Consult the updated ESEF Reporting Manual for guidance and refine your processes to ensure accurate and user-friendly digital filings.

Connecting Themes and Emerging Trends

Beyond the core enforcement priorities, ESMA is drawing attention to broader themes:

• Connectivity : Reports should seamlessly link financial and sustainability data to tell a cohesive story.
• Greenwashing mitigation : Quality improvements in sustainability disclosures will help reduce misinformation.
• Future standards : Companies should prepare for changes like IFRS 18, which will reshape how alternative performance measures are reported by 2027.

Takeaway: Create integrated narratives that bridge financial and non-financial information, while laying the groundwork for future regulatory changes.

How to Prepare for 2025

With these priorities in mind, here’s how to get ready:

• Review your current practices : Conduct a gap analysis of financial, sustainability, and digital reporting.
• Use available resources : Leverage the ESRS framework and ESEF Reporting Manual to guide compliance.
• Strengthen governance : Ensure your internal controls are robust and your teams understand the new requirements.
• Collaborate early : Work closely with auditors and stakeholders to align on expectations and resolve issues before reporting deadlines.

ESMA’s 2025 priorities mark a pivotal step in corporate reporting, aiming for higher standards of transparency and alignment. By acting now, you can stay ahead of these changes and ensure compliance with evolving regulations.

Don’t wait to adapt to these new requirements. Contact us today to learn how we can help you navigate ESMA’s 2025 priorities and prepare your reports with confidence.