EFRAG has submitted its draft simplified ESRS to the European Commission, proposing a 61% reduction in datapoints and a clearer, more focused materiality assessment. The draft eases value-chain data requirements, removes voluntary disclosures and emphasises relevance and fair presentation. It maintains the ESRS architecture while streamlining language, improving ISSB interoperability and enabling more principles-based reporting. Reliefs and phase-ins support practical implementation, aiming to deliver useful sustainability information with far lower reporting burden.
On 3 December 2025, EFRAG submitted its technical advice on the draft simplified European Sustainability Reporting Standards (ESRS) to the European Commission. This marks a key milestone in the EU’s effort to streamline sustainability reporting and reduce administrative burden while preserving robust and decision-useful transparency. The simplified standards were developed under the Commission’s 2025 “Omnibus” request, which mandated EFRAG to explore proportionate solutions for companies subject to the Corporate Sustainability Reporting Directive (CSRD).
Key features of the draft simplified ESRS
1. Significant reduction in datapoints
The draft standards reduce mandatory disclosure datapoints by 61%, accompanied by the removal of all voluntary disclosures. Only information deemed material is required, and no datapoints outside the scope of information materiality must be disclosed. This reduction is supported by clearer reporting boundaries distinguishing own operations from value chain activities.
2. Proportionality built into all reporting steps
Proportionality is embedded across the entire reporting cycle:
- simplified and restructured materiality assessment,
- streamlined data collection,
- reduced granularity of disclosures, and
- broad use of the “undue cost or effort” principle.
The materiality assessment is now clearer, less documentation-heavy, and aligned with audit expectations. It introduces:
the concept of inherent impact,
- principles-based guidance on prevention, mitigation and remediation actions,
- clarified expectations on geographic levels of assessment, and
- flexible aggregation or disaggregation depending on how impacts, risks and opportunities are managed internally.
3. Focus on useful, relevant information
The simplified ESRS place a stronger emphasis on fair presentation, aligning closely with IFRS S1 expectations. A stricter relevance filter ensures that disclosures focus on information that truly matters for users, reducing unnecessary compliance requirements and boilerplate reporting.
4. Simplified value-chain reporting
The previous preference for direct value-chain data has been removed. Companies may rely more broadly on estimates, easing data-collection pressures, especially for complex supply chains. Reliefs apply in areas such as acquisitions, joint operations without operational control and non-material activities.
5. Maintaining the ESRS architecture
Despite simplification, the overall structure of the ESRS is preserved, ensuring coherence between simplified and full frameworks:
- Cross-cutting standards (General Requirements, General Disclosures)
- Environmental standards (Climate, Pollution, Water, Biodiversity, Resource Use & Circular Economy)
- Social standards (Own Workforce; Workers in the Value Chain; Affected Communities; Consumers and End-Users)
- Governance standard (Business Conduct).
6. More principles-based narrative reporting
The standards allow flexible, principles-based presentation of policies, actions and targets. Undertakings may:
- report by topic or by specific impacts/risks/opportunities,
- use internal references, appendices and executive summaries to increase readability,
- add non-material information when useful for users.
The focus shifts toward explaining how sustainability matters are managed, rather than producing overly prescriptive data-heavy reports.
7. Major reliefs and phased implementation
The simplified ESRS include proportionate reliefs and targeted transition periods for difficult disclosures. Reliefs come without fixed time limits but include transparency requirements and expectations for progressive improvement.
A phase-in approach is foreseen for Wave 1 undertakings, with additional phase-ins for future reporters to be determined by the European Commission.
8. Improved interoperability with ISSB
The simplified ESRS enhance alignment with the ISSB standards, particularly regarding:
- shared core disclosures,
- improved definitions of the GHG emissions boundary, and
- treatment of anticipated financial effects of sustainability impacts, risks and opportunities.
9. Shorter, clearer standards
Language throughout the simplified ESRS has been streamlined for readability and ease of implementation. The removal of duplication and the simplification of architecture significantly reduce complexity.
Outlook
With EFRAG’s technical advice submitted, the European Commission will evaluate the draft simplified ESRS and consider their inclusion in a delegated act. The updated standards may apply in upcoming reporting cycles, giving companies time to adapt their internal processes and materiality procedures. For sustainability, finance and reporting teams, the development represents a central evolution of the EU sustainability reporting landscape toward more efficient, focused and actionable reporting.
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