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Auditor, CPA (U.S.), Graduate in Business Administration, Head of Accounting, Reporting & Process Advisory
Setting the Course in Sustainability Reporting: EFRAG Submits Final ESRS Drafts Simplified to the EU Commission
- The mandatory data points have been reduced by 61% to limit the reporting effort.
- The standards are more clearly structured and enable more flexible, pragmatic implementation.
- Detailed changes to all ESRS drafts can be found in our series of articles.
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On December 3, 2025, the European Financial Reporting Advisory Group (EFRAG) submitted the final drafts of the revised ESRS to the EU Commission – these reduce reporting burdens, increase flexibility and improve stakeholder relevance.
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On December 3, 2025, the European Financial Reporting Advisory Group (EFRAG) submitted the final drafts of the revised European Sustainability Reporting Standards (Draft Simplified ESRS) officially as a technical recommendation to the EU Commission. This marks an important milestone: The revision of the standards first adopted in 2023 has been completed by EFRAG, and the EU Commission can initiate the legislative implementation. Companies should finally receive legal certainty in the course of 2026 and integrate the changes into existing processes at an early stage.
Political Context: The Omnibus Initiative as a Driver of the ESRS Revision
The revision of the ESRS is part of a larger political reform framework. With the publication of the first Omnibus Package on sustainability reporting and corporate due diligence on February 26, 2025, the EU Commission launched its comprehensive initiative to reduce reporting burdens. The aim is to reduce bureaucracy and strengthen the competitiveness of European companies.
A central element of the Omnibus I package was the announcement of a delegated act to revise the first ESRS, which should take place no later than six months after the entry into force of the Omnibus Directive amending the reporting content. At the end of March 2025, the EU Commission then gave EFRAG, which had already been commissioned to develop the currently valid Set 1 of the standards, the mandate to revise the ESRS.
Development of the Draft Simplified ESRS: Intensive Revision Process with Broad Stakeholder Involvement
Following the granting of the mandate, a comprehensive, dialogue-oriented process began, which included two public consultations, two field tests on specific issues and 21 outreach events. The EFRAG Progress Report of June 20, 2025 already presented the six central levers for simplifying the standards, which were derived from the EFRAG analysis of the 2024 reporting and the first public consultation:
- Lever 1: Simplification of the double materiality analysis
- Lever 2: Better readability and conciseness of the sustainability statement and stronger integration into corporate reporting
- Lever 3: Revision of the relationship between Minimum Disclosure Requirements (MDRs) and thematic standards
- Lever 4: Clearer Differentiation of structure and language of the standards
- Lever 5: Introduction of further Facilitations to reduce the reporting burden
- Lever 6: Stronger interoperability with international frameworks
These levers formed the strategic backbone of the revision and served as a common thread for the concrete adaptation of the individual standards. They were supplemented by a systematic review of all standards with regard to the deletion of redundant or non-decision-relevant data points.
Cross-cutting innovations of the Draft Simplified ESRS
The Draft Simplified ESRS bring with them a number of fundamental changes that significantly simplify the reporting process for companies and at the same time focus more strongly on the actual information needs of stakeholders. A central step is the Reduction of mandatory data points by 61%. By eliminating less relevant information and streamlining narrative requirements, reporting becomes significantly more efficient without losing substantive content.
Equally crucial is the clear separation between mandatory information and accompanying guidance. By directly assigning all application requirements (“Application Requirements”) to the respective disclosure requirements and the complete removal of voluntary data points, the standards gain significantly in clarity, transparency and user-friendliness.
The Draft Simplified ESRS also introduce a more pronounced proportionality approach anchored. Companies can increasingly use estimates, implement requirements gradually and use the “undue cost or effort” mechanism. Special situations such as acquisitions, disposals or joint operations are also addressed more flexibly, which further increases practical feasibility.
Another significant change concerns the structural streamlining of the standards, which improves readability and integration into existing company reports. Companies are given more flexibility, for example through the use of executive summaries, thematic appendices or separate presentations of EU taxonomy-relevant information. At the same time, numerous qualitative topic-specific details are prepared more centrally by relocating them to the ESRS 2 chapter – a contribution to promoting understanding of the overall context.
In addition, the Draft Simplified ESRS increase the interoperability with international frameworks such as ISSB and GRI. This greater harmonization makes it easier, especially for globally operating companies, to consistently apply different reporting standards and reduces duplication of effort in reporting.
Finally, the focus of the standards shifts more towards decision usefulness of the disclosed information. Instead of a purely compliance-oriented approach, companies should explicitly provide information that is actually relevant and materiality-based for investors and other stakeholders. The change of perspective should improve the quality of communication and make reporting more strategic. This is closely related to the introduction of the “Fair Presentation” principle, which separately emphasizes relevance as a quality feature of sustainability reporting and is intended to promote balanced reporting.
Further information on the Draft Simplified ESRS
In our following series of articles on the Draft Simplified ESRS, we will give you a detailed overview of the key changes for each standard area.
- ESRS 1 & 2 – General Requirements and General Disclosures: Simplifications with regard to the double materiality analysis, new principles and concepts such as the “Fair Presentation”, targeted facilitations and changes to the data points on concepts, measures and goals.
- ESRS Environmental Standards (E1–E5) – Climate Change, Pollution, Water, Biodiversity and Resource Use: Targeted streamlining and adaptation of the environmental standards as well as increased practicality through new guidelines, definitions and clarifications.
- ESRS Social Standards (S1–S4) – Company’s workforce, workforce in the value chain, affected communities and consumers and end users: In particular, selective changes to the S1 indicators and cross-cutting consolidation of qualitative data points.
- ESRS Governance Standard (G1) – Corporate Governance: Orientation towards the “PAT” structure (concepts, measures, goals) analogous to the other standards, as well as deletion, consolidation or specification of numerous data points.
Next steps
The Draft Simplified ESRS are now being incorporated into the legislative process of the EU Commission. A further public consultation is planned before the standards are expected to be adopted as a delegated act amending the currently valid Set 1 of the ESRS in mid-2026. The start of application is scheduled for January 1, 2027, possibly with an option for early application in the 2026 financial year. Companies should closely monitor current developments and review changes at an early stage, in particular with regard to the structural innovations, the reduced data points and the more flexible proportionality mechanisms.