During 2025, 21 Danish financial companies (13 credit institutions and eight insurance and pension firms) published a sustainability report together with their financial report for the first time.
Using this information the Danish Financial Supervisory Authority (DFSA) released a study on the sustainability reporting practices of financial firms complying with the Corporate Sustainability Reporting Directive (CSRD) and the related European Sustainability Reporting Standards (ESRS).
The CSRD and ESRS represent milestones for the EU, as they set an obligation to report along with the first set of standards for sustainability reporting.
To comply, companies need to include sustainability information in their management and annual reports. The sustainability information needs to be standardized, which means it must be prepared in adherence to the ESRS standards, and as such must also be subjected to external assurance.
In parallel to the first-time implementation, as a result of EU-wide simplification efforts, the Omnibus I package brought significant changes to both CSRD and ESRS. The DFSA has acknowledged that this potentially adds complexity, and plans to focus on guiding the financial sector in meeting the new requirements.
DFSA analysis
The DFSA’s analysis looked at how the financial institutions met the double materiality assessment requirements in their reports.
In addition, a more in-depth sample study was conducted involving the reports of five selected companies. The study assessed parts of the reporting that would ideally be relevant after the Omnibus-related simplification: ESRS 2 (general information), ESRS E1 (climate change), and the disclosure requirements for ESRS 2 IRO-1.
Observations from the overall analysis
- Presentation and reporting quality: The reports followed the ESRS 1 structure and were easy to read. On the other hand, in some cases the reports were relying on standard text without adding the necessary context or lacked information on how material impacts, risks, and opportunities (IROs) had been identified.
- Double materiality: All companies had carried out a double materiality assessment. They had found between five and seven of the ESRS topical standards to be material, with E1 (climate change), S1 (own workforce) and G1 (business conduct) being deemed material for all companies.
In-depth study of the five companies
- Value chain: Companies assessed the full value chain, but focused on downstream – where they finance, invest, and insure.
- Lack of information: Insufficient information was provided around the stakeholder engagement process, climate transition plan-related CAPEX, OPEX and scope 3 GHG emissions as well as how the companies’ management engages with the material IROs.
Moving forward
Following the publication of the Omnibus the DFSA expects clarification during 2026 on the revisions to the ESRS. Given that the rules will be new to the industry, the DFSA is set to ‘prioritize guidance over supervisory response’, in the expectation that in the future, sustainability and financial reporting supervision will be on equal footing.