In December 2025, EFRAG delivered its draft Simplified European Sustainability Reporting Standards (ESRS) to the European Commission as technical advice. The Commission is expected to adopt the proposed amendments through a delegated act in the first half of 2026. The revised sustainability reporting standards are intended to reduce the reporting burden for undertakings by introducing greater flexibility in CSRD reporting, while retaining the core objectives of the EU Green Deal. The content of the revised ESRS has been shaped through extensive outreach and consultations involving more than 700 stakeholders, including preparers, sustainability assurance providers and investors.
What the new ESRS will change
- A significant reduction in reportable data points (61%)
- A simplified and clarified Double Materiality Assessment (DMA) process
- More flexibility for reporting value chain information (including the use of estimates where appropriate)
- A more practical way to present policies, actions and targets
- Enhanced interoperability of CSRD reporting with the ISSB Standards
Why should you familiarise yourself with the new ESRS already now?
The new versions of the ESRS still require approval by the European Commission. Nevertheless, undertakings reporting under the CSRD should already start reviewing them, as changes to required data points will directly affect what data it makes sense to collect—and at what level of granularity. The reliefs introduced by the revised ESRS can be leveraged already in FY 2026 reporting. This applies both to undertakings that have already reported under the CSRD and to those preparing to start CSRD reporting from FY 2027. The latest versions of the ESRS would apply from FY 2027 onwards, provided the undertaking falls within the scope of CSRD reporting at that time.
What is relevant for executive management?
- Lower administrative burden – fewer data points can reduce time and resource demands across the reporting process
- Easier strategic communication – more concise, more precise and increasingly principles-based reporting supports coherent market, customer and investor communications
- Competitive advantage – a more straightforward and more cost-efficient reporting process can be a differentiator as sustainability expectations continue to tighten
- Sharper compliance and risk management – early and proactive readiness for upcoming EU requirements can reduce sanctions and compliance risks
ESRS 1 and ESRS 2 – Key changes
- Greater emphasis on “fair presentation” – reporting should provide a faithful and balanced picture of the undertaking without disproportionate cost or effort
- Clearer DMA guidance and disclosures – improved compatibility with sustainability assurance expectations
- More flexible structuring of sustainability information – either organised by topical standards or around identified impacts, risks and opportunities (IROs)
- More high-level governance and business model disclosures – simplified requirements on stakeholder engagement and financial effects
Environmental standards (E1–E5)
Climate Change (ESRS E1)
- Simplified data point requirements for GHG emissions (Scope 1–3) reporting
- Improved alignment with information requirements in IFRS S2
- More flexibility in climate-related target setting and methodologies used
Pollution (ESRS E2)
- Reduced reliance on E-PRTR references, replaced with more general reporting requirements
- Microplastics disclosure requirements split into primary and secondary disclosures
- “Substances of concern” disclosure requirements narrowed to undertakings for which they are relevant
Water and Marine Resources (ESRS E3)
- Clearer concept definitions for water stress
- Fewer data points – the scope of the standard was refined to focus on water resources
- More specific requirements on water withdrawals, wastewater discharges and water storage
Biodiversity and Ecosystems (ESRS E4)
- Transition plan disclosed only if such a plan exists
- Scenario and resilience analysis is voluntary
- Simplified requirements for policies, actions and targets
Resource Use and Circular Economy (ESRS E5)
- Introduction of a “key material” concept in resource inflows
- Clearer integration of circularity and Ecodesign considerations
- New Waste-related data points
Social standards (S1–S4)
- Significant reduction in data points for policies, actions and targets
- Simplified requirements related to workforce, pay, social protection and diversity disclosures
- New definitions for reporting on human rights incidents – only material topics are to be reported
Governance (G1)
- Re-structured topical standard so that policies, actions, targets and metrics are presented in dedicated sections
- Simplified metrics for reporting on corruption, political engagement/influence and payment practices
- SFDR indicators are retained
What happens next in the legislative process?
- The European Commission will prepare a delegated act based on EFRAG’s technical advice in the first half of 2026
- EFRAG will support implementation of the new ESRS through guidance, Q&A materials and training resources
What should your company do next?
- Review the draft Simplified ESRS and assess how the proposed amendments would affect your reporting processes
- Launch an internal discussion on how simplification options can be used to streamline and strengthen your sustainability reporting
