The European Financial Reporting Advisory Group (EFRAG) has announced the publication of revised Exposure Drafts for the European Sustainability Reporting Standards (ESRS), with significant simplifications to the reporting requirements for companies under the EU’s Corporate Sustainability Reporting Directive (CSRD). The updated standards eliminate all voluntary disclosures and reduce reporting datapoints by 68%, surpassing EFRAG’s earlier estimate of a 66% reduction.
This move is part of the European Commission’s Omnibus I proposal, which aims to alleviate the sustainability reporting and regulatory load on companies. The proposal addresses several regulations, including the CSRD, the Corporate Sustainability Due Diligence Directive (CSDDD), the Taxonomy Regulation, and the Carbon Border Adjustment Mechanism (CBAM).
EFRAG was tasked by the European Commission in June 2020 to prepare the initial ESRS, which were adopted by the Commission in 2023. Following the Omnibus package release, the Commission mandated EFRAG to develop technical advice for revising the ESRS to align with the simplification objectives.
In unveiling the new draft standards, EFRAG stated its focus on reducing complexity and enhancing usability, after extensive consultations with companies currently reporting under the CSRD and those preparing to do so. A key simplification area is the ESRS’ double materiality assessment (DMA), a requirement introduced by the CSRD for disclosing the risks and impacts of sustainability issues on an enterprise and vice versa. EFRAG’s consultation revealed that determining reportable topics was an onerous task, with respondents highlighting a disproportionate effort compared to the results from the DMA exercise. Consequently, EFRAG introduced “practical considerations” to streamline the DMA process, focusing on the most evident topics and ensuring the evidence level is reasonable and proportionate.
Additional simplifications include improving the readability and conciseness of sustainability statements, enhancing their connectivity with corporate reporting, and increasing the understandability of the ESRS. EFRAG also worked on the interoperability of the ESRS with the IFRS Foundation’s sustainability reporting standards, adopting similar wording where feasible and introducing relief mechanisms such as exemptions for undue cost or effort.
According to EFRAG, the new standards reduce mandatory datapoints by 57% and eliminate voluntary disclosures, leading to a 68% total reduction in datapoints. The length of the standards has been cut by more than 55% compared to the initial ESRS.
EFRAG has launched a 60-day consultation to gather feedback on the proposed ESRS update, open until 29 September 2025. The Commission has extended the deadline for EFRAG’s technical advice, with the final standard now expected by the end of November 2025.
Patrick de Cambourg, Chair of the EFRAG Sustainability Reporting Board, expressed alignment with the European Commission’s strategic vision, aiming for a more focused and usable sustainability reporting system that supports resilience, investment, and long-term value creation without overburdening companies.
For more details, access the new ESRS exposure drafts and consultation [here](https://www.efrag.org/en/amended-esrs).
