According to a recent LinkedIn post from Watershed, the European Commission has opened a consultation on a new draft of the Simplified ESRS, which will govern sustainability reporting for companies in scope of the CSRD. The post notes that this is expected to be the final draft before standards are finalized in mid-June, with 61% of data points removed versus the original ESRS but most quantitative metrics retained.
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The company’s LinkedIn post highlights several technical changes, including flexibility on GHG emissions boundaries aligned with the Greenhouse Gas Protocol and climate transition plan disclosures that may deviate from a 1.5-degree pathway, in line with ISSB. It also points to a two-year grace period for “Wave 2+” reporters before they must report on biodiversity and social value chain metrics.
The post suggests that, with limited changes anticipated before June, companies should begin reviewing the draft ESRS, planning data collection, and setting up governance processes. Watershed indicates that its policy team plans to release further guidance, implying an intent to position its services and expertise as companies prepare for incoming EU sustainability reporting requirements.
For investors, the emerging ESRS framework could drive increased demand for ESG data management, reporting, and advisory solutions, areas where Watershed is active. Early engagement with these rules may help the company deepen relationships with European and multinational clients, potentially enhancing its competitive position as sustainability reporting becomes more standardized and scrutinized across capital markets.