Proposed Simplified Sustainability Reporting Standards for Europe by EFRAG to Lessen Reporting Obligations

Proposed Simplified Sustainability Reporting Standards for Europe by EFRAG to Lessen Reporting Obligations

The European Financial Reporting Advisory Group (EFRAG) has announced the release of revised and simplified Exposure Drafts of the European Sustainability Reporting Standards (ESRS). These changes aim to make sustainability reporting under the Corporate Sustainability Reporting Directive (CSRD) more manageable, without compromising the European Green Deal or CSRD objectives.

Chiara Del Prete, Chair of the EFRAG Sustainability Reporting Technical Expert Group, emphasized the collaborative nature of the revision process, encouraging participation from preparers, auditors, investors, civil society, and national authorities. A 60-day public consultation is now open for feedback from stakeholders across the EU corporate reporting ecosystem.

Key changes in the revised ESRS include:

1. Reduced Mandatory Data Points: The number of mandatory datapoints (when material) has been cut by about 57%, making reporting less resource-intensive.
2. Shorter Standards: The overall length of the standards has been reduced by over 55%, streamlining the complexity and volume of required reporting.
3. Simplified Materiality Assessments: The revised ESRS streamline the double materiality assessment process, emphasizing proportionality and user-focused information rather than exhaustive detail.
4. Reduced Disclosure Requirements and Narrative Simplification: The standards move away from detailed and prescriptive narratives toward more flexible, clearer disclosures on strategy, governance, and policies.
5. Elimination of Voluntary Disclosures and Overlaps: To increase clarity and avoid redundancies, voluntary disclosures have been removed, and language and structure have been clarified.
6. Alignment with International Standards: ESRS revisions more closely align with frameworks like GRI, ISSB, and SASB, supporting interoperability while acknowledging some differences will remain.
7. Enhanced Flexibility and Reliefs: Companies have more leeway in presenting information, including optional executive summaries, new reliefs on data quality, and eased requirements on the financial effects of sustainability risks.
8. Clear Separation of Requirements and Guidance: The draft standards distinguish mandatory disclosure requirements from guidance, improving usability and understanding.

These changes contribute to reduced administrative and resource burdens, especially benefiting companies newly in scope of the CSRD. By focusing on fewer but more relevant and clearer disclosures, EFRAG aims to make sustainability reporting more practical and less costly to implement while preserving strong transparency and investor utility.

EFRAG is currently consulting publicly on these revisions until late September 2025, with final advice expected by November 2025 and anticipated EU adoption by mid-2026. Outreach events are planned for September and October to support engagement.

In summary, the revised ESRS streamline sustainability reporting by cutting mandatory data volume, simplifying assessments, reducing narrative complexity, and increasing flexibility—all aimed at lessening the burden on companies while retaining robust sustainability transparency.

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