ESMA names double materiality top enforcement priority for 2025 CSRD reporting

**ESMA's October 14, 2025 Public Statement set European Common Enforcement Priorities emphasising double materiality and sustainability-statement structure for the first CSRD reporting year. Indian subsidiaries of EU-listed groups and exporters caught by CSRD must strengthen entity-specific materiality disclosures. **

The European Securities and Markets Authority released its annual Public Statement on October 14, 2025, detailing European Common Enforcement Priorities for the 2025 reporting cycle of issuers on EEA regulated markets. It marked 2025 as the first reporting year for large public-interest Wave 1 companies under the Corporate Sustainability Reporting Directive. ESMA carried over two priorities from 2024: materiality considerations under ESRS and the scope and structure of the sustainability statement. The two-step double materiality assessment covering Impacts, Risks and Opportunities serves as the critical filter ensuring decision-usefulness of reports.

Wave 1 large public-interest issuers on EEA regulated markets are directly affected, with national enforcers directed to scrutinise materiality processes that ESMA found sometimes boilerplate in the first cycle. Indian companies that are subsidiaries of EU-listed parents or that fall within CSRD scope through EU operations must provide entity-specific assessment details, including input parameters, thresholds such as the severity scale for negative impacts, and treatment of gross impacts. A consolidated sustainability statement must align with the same consolidation scope as the financial statements while covering value-chain IROs.

Affected Indian and global issuers should disclose entity-specific double materiality processes rather than boilerplate, mapping material IROs to ESRS topics using correct terminology and following the four-part General, Environment, Social and Governance structure under ESRS 1. Reporters should balance cross-referencing to avoid duplication and scattering, and adopt suggested practices like Disclosure Requirement references such as E2-5 and hyperlinks. Issuers must illustrate connectivity between sustainability and financial statements for shared monetary and quantitative information, despite regulatory flux from the EC Omnibus package.

Key figure — ESMA Public Statement date: October 14, 2025 for the 2025 CSRD reporting cycle