Final Draft Simplified ESRS: An overview of the changes to the governance standard

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The final drafts of the revised European Sustainability Reporting Standards (ESRS), published on December 3, 2025, clearly show that the European Financial Reporting Advisory Group (EFRAG) has taken its task seriously and has achieved a significant streamlining of the standards. The changes are extensive and lead to noticeable simplifications – 61% of the mandatory data points have been removed compared to the currently valid version of the ESRS. In our overarching article on the new ESRS drafts, you will find an overview of the overall context of the ESRS revision, the process to date and the general measures to simplify the standards. The following focuses on the central changes to the governance standard ESRS G1.

The G1 “Corporate Governance” topic standard has been adapted in the revised drafts of the ESRS. As part of the revision, the structure of the standard was fundamentally changed and the number of data points was significantly reduced.

Changes in topic standard G1 – Corporate Governance

In the new structure, the topic-specific standard ESRS G1 “Corporate Governance” now also follows the PAT architecture with the disclosure requirements on concepts (G1-1), measures (G1-2) and targets (G1-3) in connection with corporate governance as well as key figures on corruption and bribery cases (G1-4), political influence and lobbying activities (G1-5) and payment practices (G1-6). In terms of content, the standard was structured according to topics and summarized into the following three sub-topics:

1. Corporate culture (including anti-corruption and bribery measures, protection of whistleblowers and animal welfare). The specific topic of corporate culture is no longer addressed by its own data points.
2. Management of relationships with suppliers, including payment practices (in particular late payments to small and medium-sized enterprises)
3. Political engagement including lobbying activities

At the same time, a clear distinction was made from the governance information in ESRS 2 “General Disclosures”: The previous reference and supplementary information on GOV-1 (Role of the administrative, management and supervisory bodies) has been removed.

Significant content changes

G1-1 (Concepts):

• The obligation to disclose if there are no concepts for combating corruption and bribery or for protecting whistleblowers remains in place
• The previous information on whether the introduction of such concepts is planned if they are missing and what timetable is planned is no longer required.
• A reference to the ESRS definition of “corruption and bribery” from the ESRS glossary has been added in AR 1.
• The information on functions or roles with an increased risk in relation to corruption and bribery has been clarified (AR 3: Definition and examples, e.g. activities in high-risk countries or with regular contact with authorities)

G1-2 (Measures):

• Information on training measures has been consolidated, but the information on whether procurement teams receive training on sustainability-related supplier management is now mandatory.
• Processes for the prevention, detection, investigation and handling of corruption and bribery must now be disclosed here and no longer under G1-3 (previously “Incidents in connection with corruption and bribery”).

G1-3 (Targets):

• Newly introduced disclosure requirement for qualitative or quantitative targets in connection with corporate governance including sub-topics
• The previous information on the prevention and detection of corruption and bribery must now be disclosed under G1-2.

G1-4 (Key figures on corruption and bribery):

• Here it was clarified that only convictions and penalties in connection with corruption and bribery must be reported

G1-5 (Political influence and lobbying activities):

• The terms political influence and lobbying have been clarified and the number of data points reduced.

G1-6 (Payment practices):

• The key figure “average payment term” has been removed and the focus is now on standard payment terms (with separate information on the terms for SMEs, if these are different).
• The percentage of payments made on time and the number of pending lawsuits must be disclosed.
• If the topic of “late payments to SMEs” is material for the reporting company, a company-specific key figure must be defined and disclosed in accordance with AR 10.

Conclusion

With the revision, the ESRS G1 “Corporate Governance” has been significantly streamlined, restructured and now focuses more strongly on the central sub-topics. Deletions, more precise definitions and new application requirements are intended to facilitate implementation.

Following the publication of the revised ESRS drafts, a further public consultation initiated by the EU Commission is now expected. The new ESRS are to be adopted as a delegated act by mid-2026 with a start of application from the 2027 financial year. If necessary, a right of choice for early application may already exist in 2026. We will of course keep you informed as soon as further information is available.