EFRAG publishes revised ESRS draft

On December 4th 2025, the EFRAG presented their new draft of the European Sustainability Reporting Standards (ESRS), after their initial release back in 2023 faced criticism for its complicated structure and the reporting burden it placed on businesses. As part of the Omnibus process to simplify sustainability regulation, the EU commission had asked the EFRAG for a revision earlier this year.

The main goal of the EFRAG was to enhance readability of the standards, increase clarity and reduce the number of datapoints for reporting businesses while maintaining the initial aim of ensuring comparability and transparency on their sustainability performance as core objective of the CSRD. The changes span from the overall structure of the report to simplification within each sub standard.

Overall Simplification of the ESRS

61% reduction in mandatory datapoints and removal of voluntary disclosures

The overall amount of mandatory ("shall") datapoints was reduced by 61% compared to the current ESRS according to EFRAG. This was mainly achieved by streamlining qualitative datapoints and reducing quantitative datapoints that were considered less relevant to assess the sustainability performance of a company. Furthermore, duplications in the datapoints were removed, which was especially apparent in the S1 standard on a company’s own workforce.All voluntary disclosure requirements were removed from the revised ESRS and will instead be moved to a non-mandatory guidance currently still being developed by the EFRAG. During the exposure draft in July, this was referred to as the NMIG (non-mandatory illustrative guidance)

Restructuring of Datapoints

The GOV, SBM & IRO Datapoints in the topical standards of the old ESRS have now been bundled fully into the ESRS 2, thus reducing the amount of datapoints in the topical standards.Also, the former minimum disclosure requirements (MDRs) for policies, actions and targets have been shortened and are now called general disclosure requirements (GDRs). If a company does not have any policies, actions or targets, they are not required to state this anymore. Besides, the additional topical requirements for policies, actions and targets have been removed.

Simplification of the double materiality assessment process and flexibility on process

The new materiality assessment requirements provide clearer guidance, require less documentation and are designed to better align with audit expectations. “Fair representation” is emphasised, in which the final report should reflect what is realistically material for the undertakings activities. This also includes that companies no longer have to use the long-list of AR16 in their DMA and that instead of trying to distinguish gross and net impacts, companies get clearer guidance how to include their prevention, mitigation & remediation actions. Furthermore, the revised ESRS clarify that companies do not have to redo their DMA every year if there were no material changes.

Less stringent data requirements for value chain metrics

The new ESRS have removed the explicit preference for direct value chain data over estimates. Companies are allowed to use estimates to reduce pressure for direct data collection from suppliers. The requirements provide a clearer distinction between information related to the undertaking’s own operations and information that concerns its value chain. may rely onwhere appropriate, reducingto obtain

Focus on Interoperability with ISSB

The new ESRS were designed with a strong emphasis on interoperability with the ISSB, particularly regarding information specific to the undertaking and “fair representation” of the companies’ activities and relevant sustainability topics. The “undue cost or effort mechanism” - allowing companies to better refrain from reporting an information when giving a transparent explanation why the effort to get that information was too high - was also aligned with the ISSB principles and the overall wording was harmonised to support better international comparability.

Anticipated financial effects reporting only required from 2030 onward

The disclosure requirements related to anticipated financial effects in all topical standards except for E1 on climate have been removed in the new ESRS Draft. Instead, the requirements to report on anticipated financial effects has been moved to ESRS 2 and can be answered there across topics. Furthermore, reporting on quantified financial effects has been deferred to 2030. This delay acknowledges the methodological challenges of companies for predicting financial effects, acquiring forward looking data and disclosing sensitive financial information. However, qualitative assessments will already be required from 2027 onwards.

Further details on the simplification can be found in the letter from EFRAG to commissioner Albuquerque.

EU Commission to implement new ESRS in Delegated Act

Now, it is up to the EU Commission to review the revised ESRS and start the legislative process to implement the revised ESRS as law. According to EFRAG, this is expected to take until June 2026. Until then changes could happen to the revised ESRS, but these are expected to be marginal. In the meantime, EFRAG will start working on the log of amendments, a revised datapoint list, and the supporting guidance. According to the EU commission, the revised ESRS shall enter into force for reporting years 2027, with the option for companies to already adopt them voluntarily for 2026 reporting.