Finale ESRS Exposure Drafts: An Overview of the Amendments of the Social Standards

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 achieved a significant streamlining of the standards. The changes are extensive and lead to noticeable simplifications – 61% of mandatory data points have been removed compared to the currently valid version of the ESRS. In our comprehensive article on the new ESRS drafts [Link], you will find an overview of the overall context of the ESRS revision, the process to date, and the general measures for simplifying the standards. The following focuses on the central changes to social standards ESRS S1 to ESRS S4.

Streamlined topic structure and less narrative disclosure

To avoid duplication with the cross-cutting standards, SBM disclosures will no longer be regulated in topic standards S1 to S4. Instead, they are now exclusively described in cross-cutting standard ESRS 2 “General Disclosures”. In this context, references to SBM disclosures (ESRS 2 SBM-2 “Interests and Views of Stakeholders” and ESRS 2 SBM-3 “Material Impacts, Risks and Opportunities and their Interaction with Strategy and Business Model”) have been removed from the social standards. According to EFRAG, however, the removal of these cross-references poses the risk that disclosures on material impacts, risks, and opportunities (IROs) could become more general in the future and contain less information on individual stakeholder groups.

Furthermore, the previous disclosure requirements SX-2 (“Procedures for Stakeholder Engagement”) and SX-3 (“Procedures for Remediation of Negative Impacts and Channels for Stakeholders to Report Concerns”) have been merged into a single disclosure requirement across all four social standards (S1–S4). This new disclosure requirement combines the presentation of stakeholder engagement, grievance mechanisms, and remediation measures, thereby reflecting the close connection between these processes. The new order of content – first channels, then remediation – achieves better alignment with the UN Guiding Principles on Business and Human Rights (UNGP) and the OECD Guidelines for Multinational Enterprises. Thus, the structure of the first four disclosure requirements (“Disclosure Requirements” – DRs) is harmonized across all social standards and consistently follows the PAT logic:

DR 1 – Policies, DR 2 – Engagement, Channels and Remediation Measures, DR 3 – Actions, DR 4 – Targets.

Another important change concerns disclosures in the area of human rights policies (“Human Rights Policies”). These disclosures will no longer be part of social standards S1 to S4 but have been merged into a single disclosure requirement in cross-cutting standard ESRS 2 “General Disclosures” (GDR-P). Thus, the previous eight data points from the four social standards will be reported centrally in ESRS 2, instead of separately in each individual topic standard as before. The aim of this shift is to avoid duplication, increase comparability, and facilitate auditing.

Significant Changes in Social Standard S1 – Own Workforce

Due to the merger of the previous disclosure requirements S1-2 (Stakeholder Engagement) and S1-3 (Grievance Mechanisms and Remediation Measures) into a single disclosure requirement, the numbering of all subsequent disclosure requirements in ESRS S1 shifts forward by one. The new numbering is already used in the following illustration. Topic standard ESRS S1 “Own Workforce” has been extensively revised to focus disclosure requirements more on essential content and significantly reduce the level of detail.

• S1-5 (Characteristics of Employees) (formerly S1-6): some breakdowns removed (e.g., breakdown by gender for on-call workers; total number of employees who left the company during the reporting period; regional breakdowns); new threshold: country-specific information for countries where the company has at least 50 employees and which belong to the ten largest countries by number of employees (instead of previously ≥ 10% of the total number of employees)

• S1-6 (Characteristics of Non-Employee Workers): has been reduced to a single mandatory data point. In the future, only the total number of non-employee workers must be reported; only reportable if non-employee workers constitute a material part of the business model (AR 12: “Materiality considerations for non-employees”)

• S1-7 (Collective Bargaining Coverage and Social Dialogue): within the European Economic Area: same threshold as S1-5: applies only to countries with at least 50 employees and the ten largest countries by number of employees; all other countries as before: percentage of own employees, broken down by region

• S1-8 (Diversity Metrics): the distribution of employees by age groups is omitted; only gender distribution at the top management level remains mandatory

• S1-9 (Adequate Remuneration): Methodology clarified; reference to EU Minimum Wage Directive within the EU and to ILO guidelines “ILO wage setting principles” and “ILO principles on estimating a living wage” outside the EU; disclosures on non-employee workers have been removed; reference values used to determine adequate wages must be disclosed

• S1-10 (Social Protection): Significant life events have been reduced to four: “Retirement” removed; “Parental leave” specified as “Maternity protection”; no longer a mandatory disclosure on types of employees who do not receive social protection

• S1-11 (Persons with Disabilities): Voluntary disclosure on gender distribution removed; data collection in accordance with data protection regulations (clarification in AR 21)

• S1-12 (Training and Skills Development): Gender distribution removed from mandatory disclosures

• S1-13 (Occupational Health and Safety): in the future, lost days due to fatalities are no longer to be considered; the number of fatalities attributable to illnesses no longer needs to be reported for workers in the value chain and non-employee workers; furthermore, “recordable work-related injury” has been replaced by “recordable work-related accident,” allowing for better differentiation from “recordable work-related illnesses”; as a benchmark for recordable work-related accidents, more than three days of incapacity for work have now been defined in the glossary. However, alignment with national legislation is also possible. Revision of definitions for recordable work-related accidents and work-related illnesses

• S1-14 (Work-Life Balance): in the future, only the percentage of employees entitled to family-related leave must be reported; the disclosure on actual utilization (broken down by gender) is omitted

• S1-15 (Remuneration Metrics): Content unchanged. Clarification of the methodology for calculating the unadjusted gender pay gap regarding variable remuneration components

• S1-16 (Incidents, Complaints, and Severe Impacts Related to Human Rights): Concept of “severe human rights incidents” removed; in the future, only confirmed (“substantiated”) human rights and discrimination incidents are to be reported

• New/amended definitions in the glossary for social standards: “Channel to raise concerns or needs”; “Family-related leave”; “Human rights incident”; “Incident of discrimination”; “Non-guaranteed hours employees”; “Occupational safety and health management system”; “Process to provide or cooperate in remediation”; “Recordable work-related accident”; “Recordable work-related ill health”

Changes in Topic Standards S2 – S4

The revised social standards S2 to S4 now follow – like S1 – the PAT architecture (Policies, Actions, Targets) uniformly, with disclosure requirements DR 1 to DR 4. At the same time, as explained above, the previous SBM disclosures have been completely removed from the topic standards and must now be fulfilled exclusively in ESRS 2 “General Disclosures”. Disclosures on human rights policy have also been separated from S1 to S4 and transferred to a central disclosure requirement in ESRS 2 (GDR-P).

Conclusion

With the revised drafts of social standards S1 to S4, EFRAG aims to significantly streamline reporting obligations and make them more practical, without excessively reducing the substantive breadth of the topics.

The number of data points has been significantly reduced; many detailed as well as all voluntary disclosures have been removed.

Central structural changes such as the introduction of a uniform PAT architecture, the relocation of SBM disclosures and human rights policy disclosures to ESRS 2 avoid duplication, increase comparability, and simplify implementation.

Important: The drafts are not yet final. The EU Commission is expected to conduct another public consultation and may make adjustments based on it, so companies should closely monitor developments.

Nevertheless, companies subject to reporting requirements should by no means wait with the implementation of data collection processes until the standards have been finally published as a delegated regulation: Extensive changes, particularly to key figures, are considered unlikely.