A deep dive into the ESRS exposure drafts
A deep dive into the ESRS exposure drafts
In July 2025, EFRAG published the exposure drafts of the revised European Sustainability Reporting Standards (ESRS), as part of the Omnibus simplification package from the European Commission. The exposure drafts outline the new simplified set-up and contents of the ESRS, which -after public consultation- will be poured into a new delegated act by the European Commission. Together with the threshold criteria and other formal aspects, these will form the updated CSRD-legislation for the years to come. In this blog, we will dive into the main elements of the simplified ESRS-proposal, according to the six main simplification levers suggested by EFRAG.
Exposure draft documents and data point changes
To understand the changes to the content of the ESRS, it is important to first explain the various documents that are published. The main category of documents consists of the 12 amended ESRS-standards, including an amended glossary. These 12 texts will eventually form the basis of the updated ESRS-requirements. A document explaining the rationale and methodology behind the amendments is the Basis for conclusions. To keep track of all proposed changes, the Log of amendments can be helpful. Last but not least, a new type of document is introduced: the non-mandatory illustrative guidance containing examples of how one can report on the data points. All draft documents can be found here.
All in all, the mandatory data points to be reported on if material have been cut by 57%. The full set of disclosures, including both mandatory and voluntary data points, is reduced by 68%. However, the respective reduction per standard changes considerably, with data point reductions ranging from 49% in the general disclosures of ESRS 2 to 78% in the biodiversity standard of ESRS E4. A full overview of the reductions per standards can be found in below table.
Key changes through six simplification levers
The amendments on the ESRS reporting requirements are clustered around six simplification levers, being:
A simplification of the double materiality assessment
Improved readability of the sustainability statements
A revision of the minimum disclosure requirements
Enhanced clarity and accessibility of the standards
A reduced reporting burden
Boosted interoperability with the ISSB standards.
We will now discuss these simplification levers one by one, explaining the perceived issues and the provided solutions in the exposure drafts, including concrete examples where possible.
1. Simplify the double materiality assessment
Many stakeholders perceived the DMA as burdensome and too complex due to too much focus on procedure over substance, a lack of guidance and collective misinterpretation leading to unneeded granularity (especially by auditors). Therefore, a refocus on the objectives of the DMA is needed, instead of a compliance exercise.
To fix this, fair representation has been added as a main objective for the DMA, instead of reporting on a checklist. This means that the DMA-outcomes should give a true view of the most important ESG-matters of a company, ensuring relevance and faithful representation. A top-down approach based on the business model, focusing on on-the-verge material topics is suggested, while the list of ESRS sub- and sub-sub-topics should no longer be seen as a checklist, but rather as a starting point for assessment (which already was the case in the original ESRS, but often misinterpreted).
More guidance on the inclusion of mitigation measures is developed as well. This step aims to provide a clearer answer in the gross vs. net discussion, which revolves around the question whether impacts, risks, and opportunities should be scored on a gross basis (before mitigation measures), or on a net basis (after mitigation measures) – and which of the two contributes more to the fair representation objective.
2. Improved readability of the sustainability statements
The sustainability statements often felt overly granular and inflexible to preparers, resembling compliance dumps rather than strategic narratives. Reports were also hard to assimilate or align with traditional management reporting. Companies want to be able to tell their story and avoid compliance-driven reporting.
That is why the exposure drafts include an option for executive summaries and options to include appendices for (too) granular information and EU Taxonomy-disclosures. Also, it is clarified that policies, actions, and targets only have to be reported once, avoiding fragmentation and repetition.
3. Revision of the minimum disclosure requirements (MDRs)
Overlap and redundancy between the MDRs and topical ESRS standards often caused complexity, duplication and excessive granularity in disclosures. Therefore, many felt that the MDRs should be streamlined, thereby reducing overlap and simplify reporting on policies, actions, and targets.
As a response, EFRAG proposes a move away from the MDRs to cross-cutting general disclosure requirements (GDRs) at the ESRS 2-level, with a revised number of data points. Additionally, the mandatory specifications in topical standards are reduced. There is also more flexibility regarding the level on which to disclose policies, actions, and targets at: at the topic-level, the sub-topic level or even at the IRO-level. Newly introduced is the policy, action, and target-structure for the ESRS-standard on Business conduct (G1).
Overall, the data points in the (now) GDRs are proposed to be reduced by 26%, with most specifications removed from the actions-disclosure. For metrics, a new data point is included, requiring providing contextual information to understand data better.
4. Enhanced clarity and accessibility of the ESRS standards
Another source of inefficiencies was the complex architecture of the ESRS standards itself. The voluntary ‘may’-disclosures caused confusion, as well as a misunderstanding of the application requirements. Therefore, a revised structure of the standards is introduced, separating mandatory disclosures from voluntary disclosures more clearly, and placing the relevant application requirements directly under the mandatory disclosure requirements. On the contrary, all voluntary data points and guidance coming from application requirements has been moved to the non-mandatory illustrative guidance. The disclosure requirements itself remain largely unchanged. The drafting language is streamlined as well throughout the whole set of ESRS-standards.
5. Reduced reporting burden
Although all simplification levers support a reduction of the reporting burden, this simplification levers mostly focuses on providing relief on difficult metrics and clarifying reporting and value chain boundaries. Perceived issues were difficulties in providing precise, sensitive and forward-looking data, as well as an operational burden to gather the right information.
To solve this, the ESRS now explicitly incorporate an ‘undue cost and effort’ relief, coming from the ISSB. This means that the cost of obtaining certain information should not outweigh the benefit of the stakeholder group to receive this information. This relief, however, can only be relied upon in extreme cases of costs; preparers have to put in significant effort to obtain the data before being able to fall back on the mentioned relief.
Another burden relief stems from the option to report metrics that only cover part of the value chain due to a lack of data. Non-material activities can be excluded from metric calculations as well. On top of that, the information that can be distracted from (smaller) value chain partners is limited to the content of the VSME-standard.
6. Boosting interoperability with the ISSB-standards
For companies that report under both ESRS and ISSB, differences in reporting requirements increased the burden and duplication of information. Therefore, terminology is streamlined, and greenhouse gas reporting boundaries are aligned. For example, while the ESRS used to mandate an operational control approach for calculating greenhouse gas emissions, the financial control approach of the ISSB-standards is not set as the default methodology.
What’s next?
After the public consultation period of the ESRS exposure drafts ends on 29 September, EFRAG will deliver its final technical advice to the European Commission by 30 November. At the end of the year, the Commission will issue a delegated act, after which the Council and the European Parliament have four months to either adopt or reject the proposal. All in all, we will likely have a new set of ESRS-standards by mid-2026. In the meantime, start reviewing the changes already in more detail, assess the implications for your reporting and strengthen internal (data) processes. A focus on the disclosure requirement-level can help you make steps in your sustainability reporting already in 2025!
This blog is written by 2Impact's Marco Kwakernaat. Want to know more? Please reach out to marco@2impact.nl or read one of our previous blogs about updates on the Omnibus: The Omnibus – what does it include and what does it mean for companies? - News,
Omnibus negotiations: Parliament and Council developing positions - News,
