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Posted: August 1, 2025
EFRAG’s revised ESRS proposal removes voluntary disclosures, cuts datapoints by 68%, and simplifies the double materiality assessment. With clearer guidance, shorter reports, and global alignment, the update seeks to make sustainability reporting more practical for companies while maintaining its ambition.
The European Financial Reporting Advisory Group (EFRAG) has released updated draft European Sustainability Reporting Standards (ESRS), significantly cutting complexity for companies reporting under the EU’s Corporate Sustainability Reporting Directive (CSRD). The new proposal removes all voluntary disclosures and slashes reporting datapoints by 68%, exceeding EFRAG’s earlier reduction estimate. This overhaul is part of the European Commission’s Omnibus I initiative, which aims to ease regulatory burdens across key frameworks, including the CSRD, Corporate Sustainability Due Diligence Directive, Taxonomy Regulation, and Carbon Border Adjustment Mechanism, marking a major shift toward simplified sustainability reporting.
EFRAG’s revisions are based on extensive consultations with companies already reporting or preparing to report under the CSRD. A key focus was simplifying the double materiality assessment (DMA), a requirement that asks companies to disclose both how sustainability issues affect them and how their operations impact the environment and society. Respondents described the process as disproportionately complex, prompting EFRAG to introduce practical guidelines, clarify that companies should focus on the most obvious topics, and emphasize proportionate evidence requirements. Additional updates improve the clarity, readability, and connectivity of sustainability statements, while aligning language and relief mechanisms with IFRS Foundation standards to improve global interoperability.
The updated ESRS drafts are more than 55% shorter than the originals, with mandatory datapoints reduced by 57% and total datapoints, including voluntary disclosures, down by 68%. EFRAG has opened a 60-day consultation period, running through September 29, 2025, to gather feedback before delivering final recommendations by November. “These revisions aim to deliver what Europe needs at this moment: a more focused, more usable sustainability reporting system that remains ambitious but does not overburden companies,” said Patrick de Cambourg, Chair of EFRAG’s Sustainability Reporting Board. By streamlining requirements, EFRAG seeks to ensure simplified sustainability reporting supports business resilience, long-term value creation, and investment in Europe’s sustainable future.
