The 2026 EFRAG State of Play Report reveals that 69% of European companies disclosed climate transition plans for FY2025, up from 55% a year earlier, highlighting growing adoption of CSRD reporting requirements. 

However, the report also identifies significant gaps in sustainability performance. Only 57% of companies reported both near-term and long-term decarbonization targets aligned with the 1.5°C pathway, while organizations set measurable targets for only half of the sustainability topics they identified as material. Climate change and workforce issues received the strongest target coverage, whereas biodiversity, water, pollution, and value-chain impacts continue to lag. 

The report further found that 63% of companies link sustainability targets to executive remuneration, reflecting stronger governance practices, although over one-third still lack formal accountability mechanisms. 

Overall, EFRAG concludes that while climate transition planning is becoming standard practice across Europe, companies must strengthen measurable targets, improve governance, and ensure sustainability strategies extend beyond climate to fully meet CSRD expectations. 

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