What Do the Revised ESRS Mean for the Aviation Industry?

Why better sustainability information can support better decisions across aviation, from aircraft lessors and lenders to insurers and airports.

The European Commission’s recent approval of the revised European Sustainability Reporting Standards (ESRS), together with its endorsement of the Voluntary Sustainability Reporting Standard for SMEs (VSME), marks another important step in the evolution of sustainability reporting. While the broad direction of travel has changed very little, for many organisations including most aircraft lessors, it brings welcome simplification and a more proportionate approach to reporting.  

In the rest of the world, sustainability reporting continues to evolve through initiatives such as the International Sustainability Standards Board (ISSB) standards. There are also jurisdiction-specific requirements such as Australian Sustainability Reporting Standards (ASRS). Investors, lenders, customers, regulators, and business partners continue to seek reliable information to understand sustainability-related risks and opportunities of the companies they are working with. 

Specifically in aviation, the question has moved to what information supports better business decisions? The industry has always been built on long-term assets, complex value chains, and significant capital investment – so from a sustainability perspective the question is what information supports better governance and informs strategy, helping the aviation business understand risks and opportunities that will influence long-term business performance. At PACE, our work with organisations across the aviation value chain gives us a practical perspective on how sustainability data moves beyond disclosure and into business decision-making. 

What changed in the revised ESRS?

The revised ESRS reflects the EU’s objective of making sustainability reporting more proportionate while retaining the information needed to understand an organisation’s material sustainability-related impacts, risks, and opportunities. Key changes include: 

• Reduced disclosure requirements – Mandatory disclosure requirements have been reduced by around 60%, simplifying reporting while retaining information considered most relevant to investors and other stakeholders.  

• A stronger focus on materiality – The revised standards reinforce the importance of focusing on an organisation’s material impacts, risks, and opportunities, enabling organisations to concentrate on the issues that genuinely influence long-term performance and resilience.  

Why does sustainability information matter for business decisions?

Sustainability information helps complete the overall picture presented by traditional financial reporting by providing insight into governance, people, value chains and climate-related risks, all factors that influence business performance but are not reflected directly in the financial statements. Within the European sustainability reporting framework, this broader perspective is reflected through the concept of double materiality. Rather than being an additional exercise, it provides a structured approach to identifying the sustainability-related issues that matter most to an organisation. It encourages organisations to consider both how sustainability-related matters may affect the business (financial materiality) and how the business affects people and the environment (impact materiality). For the aviation sector, decisions relating to fleet investment, financing, insurance, infrastructure, fuel strategy, and supply chain resilience are better supported. 

What do the revised ESRS mean for the aviation sector?

Aviation organisations may be subject to different reporting requirements, but they are all part of the same interconnected value chain where investors, lenders, customers, insurers, manufacturers, regulators, and business partners rely on high-quality information to understand risk, inform investment, and support long-term decision-making. As David Lowe, CEO of PACE, recently observed, “the underlying reality hasn’t changed, climate risk remains a business risk.”  

What do the revised ESRS mean for aircraft lessors?

Lessors remain at the centre of the aviation value chain, balancing the expectations of investors, lenders, airline customers, manufacturers, insurers, and regulators. 

High-quality sustainability information supports: 

• Portfolio management – Understanding the sustainability-related performance of leased assets helps inform investment decisions, residual value assessments, fleet strategy, and long-term portfolio resilience.  

• Value chain engagement – Reliable information from airline customers and other value chain partners supports customer dialogue, portfolio analysis, financing discussions, and voluntary sustainability reporting where appropriate.  

• Access to finance – Investors and lenders increasingly consider sustainability-related information alongside financial and operational performance. Organisations able to provide reliable, consistent information are often better placed to respond to financing requirements and evolving market expectations.  

Why does sustainability information matter to aviation lenders?

These financial institutions continue to assess a broad range of financial and non-financial factors when evaluating long-term risk. Reliable sustainability information supports lending decisions, sustainable finance initiatives, and ongoing engagement with borrowers by providing greater transparency around business resilience, governance, and transition planning. 

How can sustainability information support aviation insurers?

Insurers increasingly consider both physical and transition risks when assessing long-term exposures. Consistent sustainability information supports more informed discussions around operational resilience, asset management, and emerging risks across the aviation sector. 

Why is sustainability reporting relevant to airports?

Airports sit at the centre of the aviation ecosystem, balancing operational performance with infrastructure investment, energy management, environmental impacts, and community expectations. Reliable sustainability information supports long-term planning, collaboration across the aviation value chain, and investment decisions that often extend over decades. 

How can sustainability data improve aviation decision-making?

The objective is not to collect more data. The value of sustainability information lies in the insight it provides and the decision-making it supports. It enables organisations to respond more effectively to evolving customer expectations and investor requirements. 

Fuel strategy provides a good example. Decisions around Sustainable Aviation Fuel (SAF), fleet renewal, and emerging propulsion technologies involve significant long-term investment and uncertainty. Understanding emissions performance, technology pathways, future regulatory developments, and operational impacts enables organisations to evaluate options, assess trade-offs, and make better-informed decisions. At PACE, the value lies not in reporting the data, but in using it to support sound judgement.  

Looking Beyond Reporting

Reporting frameworks will continue to evolve. Requirements will change, thresholds will be revised, and standards will mature as regulators, investors, businesses, and society develop a better understanding of the information that is most useful. Organisations operating internationally will continue to navigate different reporting requirements, but the overall direction is clear: sustainability-related information will be an ever-increasing part of understanding long-term business performance. Financial reporting provides an essential understanding of an organisation’s financial position, while Sustainability information helps complete that picture by providing insight into the impacts, risks, and opportunities influencing long-term business success. Ultimately, sustainability reporting should never be viewed as the destination. Instead, it is the supporting role it plays together with financial reporting that leads to better information and better business decisions. 

	David Lowe CEO [email protected]