Takeaways

• Norges Bank Investment Management (NBIM) is urging the EU to allow a single sustainability report aligned with both ESRS and ISSB standards.
• The investor says better alignment would reduce reporting burden while improving global comparability for capital markets.
• NBIM warns that divergence between EU and global standards could increase complexity and weaken investor transparency.

Norges Bank Investment Management (NBIM), which manages Norway’s $2 trillion sovereign wealth fund, has called on the European Union to simplify sustainability reporting by enabling companies to publish a single report that meets both European Sustainability Reporting Standards (ESRS) and global ISSB requirements.

The investor believes that a unified approach would reduce duplication and improve consistency for global markets. In its response to the European Commission’s consultation on revised ESRS, NBIM said companies should not be forced to prepare separate disclosures for different regulatory systems when the frameworks can be better aligned.

“The draft is a step forward, but true simplification means one report, not two,” said Carine Smith Ihenacho, Chief Governance and Compliance Officer at NBIM.

Read More: ISSB Sustainability Reporting Gets Boost With New ISS IFRS Program

Push for Alignment Under EU Omnibus I

The call comes as the EU continues to revise its sustainability framework under the EU Omnibus I sustainability reform. The initiative aims to simplify reporting rules while maintaining essential climate and environmental disclosures.

Recent changes to the Corporate Sustainability Reporting Directive (CSRD) significantly reduced its scope. Companies with fewer than €450 million in revenue and fewer than 1,000 employees are now excluded, cutting the number of firms required to report by around 90%.

At the same time, the European Financial Reporting Advisory Group (EFRAG) has proposed major revisions to ESRS, including a 61% reduction in mandatory data points. The updated framework also removes all voluntary disclosures, streamlining the overall reporting structure.

ISSB Seen as Global Benchmark

NBIM emphasized that the International Sustainability Standards Board (ISSB) has become the leading global baseline for sustainability reporting. Around 42 jurisdictions, representing nearly 60% of global GDP, have already adopted or aligned with ISSB standards.

The ISSB’s IFRS S1 and IFRS S2 standards, introduced in 2023, focus on sustainability-related risks and climate disclosures that are financially material to investors.

NBIM argues that while the EU’s double materiality approach remains important, it can still be aligned with ISSB principles. Double materiality requires firms to report both financial impacts and their environmental and social footprint.

Calls for Technical Fixes

To support a single-report system, NBIM has proposed targeted technical adjustments. These include a “non-obscuring principle” to ensure investor-relevant data is clearly visible, and greater flexibility in how companies structure reports so they comply with both ESRS and ISSB frameworks.

The fund also cautioned against weakening interoperability with ISSB standards, warning that proposed delays in some disclosures, particularly on anticipated financial effects, could create gaps with global reporting expectations.

NBIM further suggested integrating IFRS industry-based guidance, including SASB Standards, into ESRS assessments to improve sector-level consistency.

Balancing Simplicity and Global Access

NBIM also encouraged closer cooperation between EU regulators and ISSB on emerging areas such as nature-related disclosures, which are being developed under the IFRS framework.

For companies, the proposal could reduce compliance costs and reporting complexity. For investors, it could improve comparability across markets.

Also Read: ESRS: European Sustainability Reporting Standards and CSRD

Ultimately, NBIM’s position highlights a broader tension in sustainability regulation: how to maintain the EU’s leadership in ESG reporting while ensuring companies remain aligned with global capital market standards. The fund’s message is clear: Simplification and global comparability can work together if the final design allows a single, integrated reporting system.

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Source: ESG NEWS