FE fundinfo's Helen Slater: Sustainability reporting simplification fails to ease burden

This article by Helen Slater, Regulatory Manager at FE fundinfo, was originally published in Investment Week in November 2026.

Sustainability reporting requirements are changing across the UK and EU, with both looking at ways to simplify existing frameworks.

But for investment managers operating across borders, simplification in one part of the reporting chain does not necessarily mean simplicity overall.

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In the EU, the European Commission's February 2025 Sustainability Omnibus simplification package has introduced changes to the Corporate Sustainability Reporting Directive (CSRD), while the European Sustainability Reporting Standards (ESRS) have also been revised.

Alongside this, policymakers are progressing proposed reforms to the Sustainable Finance Disclosure Regulation (SFDR).

The UK is following its own path. The government finalised UK Sustainability Reporting Standards (UK SRS) S1 and S2 earlier this year, based on the International Sustainability Standards Board's IFRS S1 and S2 standards. They are currently available for voluntary use, while the regulatory framework around their wider application continues to develop.

Each initiative has a different scope and purpose. However, together they raise an important question for investment managers: as the UK and EU reshape their sustainability reporting frameworks, will the information which managers rely on become easier to use, or will differences between regimes create additional complexity?

Different rules, connected data

One of the challenges is that corporate sustainability reporting and investment product disclosure sit at different points in the same data chain.

CSRD and ESRS govern sustainability information reported by companies in scope, while UK SRS provides a UK framework for corporate sustainability-related financial disclosures. 

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SFDR, meanwhile, governs sustainability-related disclosures by financial market participants and for financial products in the EU, while the UK's Sustainability Disclosure Requirements (SDR) regime introduces sustainability labels, disclosure requirements and anti-greenwashing rules for relevant financial products and firms.

Investment managers therefore sit downstream of much of the corporate information being produced. They need to source that information, bring it together with holdings and other fund data, apply the appropriate methodologies and ultimately use it to support their own disclosures.

That makes the quality and consistency of the underlying data important. If corporate reporting requirements change, the impact can flow through to the investment firms that consume that information.

Simplification does not mean harmonisation

There are clear benefits to simplifying sustainability reporting. Fewer unnecessary requirements and clearer definitions can reduce administrative work and make information easier to understand and use.

The challenge for cross-border firms is that the UK and EU are not operating under a single regulatory framework.

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A requirement that becomes simpler within one jurisdiction may still need to be reconciled with different definitions or reporting requirements elsewhere. For investment managers distributing products across multiple markets, the operational challenge becomes how easily the information produced under the regimes can work together.

This is particularly relevant as the EU itself looks to improve consistency across its sustainable finance framework. The relationship between corporate reporting, product disclosure and the underlying sustainability data matters because changes in one area can affect the information available in another.

Challenge remains

Whatever shape the regulatory frameworks ultimately take, managers still need to know where their sustainability data came from and how it feeds into their disclosures.

Coverage can vary between markets and types of issuer, while methodologies and levels of granularity can differ between data sources. Where reported information is unavailable, firms may also need to use estimates or other data sources, making transparency around methodology and provenance particularly important.

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For managers operating across jurisdictions, this places greater emphasis on data lineage and governance. Firms need to be able to trace information from its source through to the calculations and disclosures in which it is ultimately used.

This becomes particularly important as expectations around assurance develop. The EU's CSRD framework includes assurance requirements for sustainability reporting, while the UK is developing its own oversight framework for regulating the organisations responsible for these checks.

Managers cannot control how closely the UK and EU frameworks ultimately align but they can consider whether their own data infrastructure is capable of accommodating change.

The objective should not be to predict every regulatory change. It should be to create an infrastructure capable of responding when those changes arrive.