02.07.2026

Clarity for lessors in the latest simplified set of sustainability reporting standards proposed by the Commission

To deliver on the objective of simplification, the European Commission adopted Amended ESRS (sustainability reporting standards) with key new guidance for leasing, as Leaseurope called for. These changes should provide the EU leasing industry and its auditors with much-needed clarity. In general, lessees will report Scope 1 and 2 impacts of leased assets rather than lessors. There should also be no need for major data collection exercises by lessors to prepare Scope 3 (upstream and downstream) reporting if reasonable high-level averages can be used instead.
20260702 ESRS

The European Commission adopted a simplified set of the European Sustainability Reporting Standards (ESRS) on 3 July 2026 based on the technical advice for simplification provided by EFRAG, the European Financial Reporting Advisory Group. The aim of the amended ESRS is to clarify provisions that are deemed unclear, foster consistency with other pieces of EU legislation and provide instructions on how to apply the materiality principle under the Corporate Sustainability Reporting Directive (CSRD). 

Leaseurope has been actively following the developments on the simplification of ESRS, particularly through the work of the dedicated Task Force on ESG & Green Leasing and engaged regularly with EFRAG in view of the expected technical advice on ESRS to the Commission. 

As previously reported, the amendments proposed by EFRAG actually provided key new guidance for leasing in line with Leaseurope’s contributions. Now, the revised and simplified ESRS adopted by the Commission through Delegated Acts maintain this guidance for leasing. The key points in the simplified ESRS for leasing, as Leaseurope requested, are the following: 

  1. Confirmation that for most leases, the lessee will report impacts, risks and opportunities (IROs) of leased assets as Scope 1 and Scope 2, and the lessor will report as Scope 3.  This is regardless of the type of lease (i.e. finance lease, operating lease or right-of-use lease). 
  2. Clarification that, for leasing, the rule explained above takes precedence over other parts of the amended ESRS. This includes a section of ESRS E1 that deals with reporting boundaries as well as ‘other topical standards’ (GHG Protocol Corporate Accounting and Reporting Standard), which some auditorsinitially interpreted as overriding the new guidance on leasing. In general, the leased assets rule from ESRS 1 takes precedence over the general reporting boundaries rule. 
  3. Introduction of flexibility. Where firms have material impacts, risks and opportunities in their upstream and downstream value chains, there are more flexible rules allowing the use of estimates, reducing the pressure for direct data collection from business partners. 

Another key point is that the simplified ESRS include new guidance on what “material” impacts, risks or opportunities are to be reported. The materiality should be based on whether information is likely to be relevant to users of the reporting, rather than whether the materiality to the reporting company itself. 

The Delegated Act revising the ESRS will now be transmitted to the European Parliament and the Council of the EU for scrutiny. The measures will apply once the scrutiny period of 2 months, which can be prolonged by a further 2 months, is over.