A deep dive into the simplified ESRS

Background

In light of the Omnibus package, EFRAG worked on simplifying the European Sustainability Reporting Standards (ESRS) published in July 2023, with the aim of reducing the reporting burden. After initial exposure drafts and public consultations in the summer of 2025, a new set of ESRS standards was published on 30 November 2025. These drafts set out a simplified structure and revised content. Together with updated threshold criteria and other formal adjustments, these standards will shape the CSRD framework for the years ahead. Read more about the legal procedure and timelines in this blog.

In this blog, we explore the main elements of the simplified ESRS, based on the six key simplification levers used by EFRAG, and highlight the most important changes to standards ESRS 2 (General disclosures), E1 (Climate change), S1 (Own workforce), and G1 (Business conduct). We also look ahead and give some advice to in-scope companies on how to proceed.

 

The documents and data point changes

EFRAG published various documents regarding the simplified ESRS standards. The main category of documents consists of the 12 amended ESRS standards, including an amended glossary. 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 have been cut by almost 61%. Voluntary datapoints have been deleted altogether. The respective reduction per standard changes considerably. A full overview of the reductions per standards can be found in below table.

ESRS standard	Data point reduction (%)
ESRS 2 - General disclosures	53%
E1 – Climate change	57%
E2 – Pollution	64%
E3 - Water	70%
E4 – Biodiversity	78%
E5 – Circular economy	64%
S1 – Own workforce	57%
S2 – Workers in the value chain	68%
S3 – Affected communities	71%
S4 – Consumers/ end-users	73%
G1 – Business conduct	57%

 

Key changes through six simplification levers

The amendments on the ESRS reporting requirements are clustered around six simplification levers. We will shortly discuss each lever separately.

1. Simplify the double materiality assessment

Many stakeholders perceived the DMA as burdensome and too complex due to 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 brought back, instead of the DMA being a compliance exercise.  

The DMA should be a fair representation of the ESG-matters most important to a company. A top-down approach based on the business model, focusing on on-the-verge material topics is suggested. The list of ESRS sub-topics should be used as a starting point for assessment. Engagement with stakeholders is strongly encouraged. 

More guidance on the inclusion of mitigation measures for impact evaluation is developed as well. For actual impacts, you can consider mitigation measures of previous years, while for potential impacts you can consider already implemented measures if reasonably assumed effective.

2. Improved readability of the sustainability statements 

Companies want to be able to tell their story and avoid compliance-driven reporting, which stakeholders deemed insufficiently possible in the original sustainability statements. That is why the simplified standards 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 on policies, actions and targets. Therefore, EFRAG introduced cross-cutting general disclosure requirements (GDRs) at the ESRS 2-level, with a revised number of data points. 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.

4. Enhanced clarity and accessibility of the ESRS standards 

Another source of inefficiencies was the complex architecture of the ESRS standards itself. A revised structure is introduced, indicating mandatory disclosures more clearly, and placing the relevant application requirements directly under the disclosure requirements. All voluntary data points and other guidance has been moved to the non-mandatory illustrative guidance. The drafting language is streamlined 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. An ‘undue cost and effort’ relief is now explicitly incorporated in the ESRS. 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 too. 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 now set as the default methodology.

 

Main changes to ESRS 2, E1, S1 and G1

Below a short overview of key changes to the topical standards:

ESRS 2 – General disclosures

Most disclosures in ESRS 2 remain unchanged, although the governance-disclosures on administrative, management and supervisory bodies (formerly GOV-1 and GOV-2) are merged into one disclosure. The disclosures regarding engagement with stakeholders and interaction of IROs with strategy and business model are more prominently featured at an overarching ESRS 2-level, while deleted from topical standards. The same applies to the IRO-1 disclosures on the DMA-process.

ESRS E1 - Climate change

The revised ESRS introduce several important changes to the climate standard. A bigger focus is placed on the climate transition plan and climate risk and resilience analysis, clarifying how climate risks and resilience considerations should inform the transition plan. The approach to calculate GHG emissions is also refined, moving from an operational control approach to a financial control approach. Furthermore, scope 3-reporting is more explicitly based on materiality and the feasibility of obtaining the required data. A detailed breakdown of scope 3-emissions by category is no longer mandatory. Disclosures on the DMA-process are removed from the standard, as it is in all environmental standards, and relocated to an overarching ESRS 2-level.

ESRS S1 - Own workforce

For all social standards, including ESRS S1, the disclosures regarding interests and views of stakeholders (formerly SBM-2) and interaction of IROs with strategy and business model (formerly SBM-3) are removed from the topical standards and instead covered on an overarching ESRS 2-level. Also, the disclosures on engagement with employees and processes for remediation and channels for concerns are merged into one disclosure. Disclosure on an overarching human rights policy is moved to ESRS 2, covering all four social stakeholder groups. Lastly, many metrics on own employees are simplified.

ESRS G1 – Business conduct

For the standard regarding business conduct, the policy, action, and target (PAT)-structure has been introduced. The standard is now consistent with other topical standards. The disclosures on DMA-processes and governance structure are also removed and covered at overarching ESRS 2-level.

 

What’s next and how to proceed?

EFRAG delivered its final version of the simplified ESRS on 30 November 2025. The Commission will issue a delegated act by Q2 2026, 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 approved ESRS-standards by mid-2026. 

In the meantime, we recommend to start reviewing the changes already in more detail. For companies already reporting in line with ESRS, this means assessing the preliminary implications for your sustainability reporting, such as analysing what must stay and what might go to increase the relevance of your report. And to update your DMA to capture changes in your internal and external business environment and organisation, in line with newly issued guidance. For companies that are still new to ESRS-reporting but have started preparations, we advise to start with performing a DMA update before assessing material disclosure requirements. Based on your material disclosure requirements we suggest to start strengthening internal (data) processes in time to be ready for (mandatory) sustainability reporting over 2027. Since the proof of the pudding is in the eating we highly recommend to use 2026 as your first reporting year. This will enable you to gain the necessary experience and improve both process and contents in 2027.