Switching to European Sustainability Reporting Standards: Early Evidence

The switch to European Sustainability Reporting Standards (ESRSs) denotes a significant paradigm shift within sustainability reporting under the scope of the Corporate Sustainability Reporting Direc- tive. To date, real effects arising from early adopters are still lack- ing. As such, we avoid this issue by investigating whether the ESRS adoption has influenced the circular economy performance. Using a Difference-in-Differences analysis, we compare changes in circu- lar economy performance between a treatment group (firms that transitioned to ESRSs in 2024) and a control group (firms that have not transitioned to ESRSs). We find that the ESRS adoption had no significant impact on circular economy performance. Overall, this study is expected to provide the first early evidence arising from the switch to ESRSs.