In a nutshell
- The European Commission mandated EFRAG to simplify ESRS in February 2025 after stakeholder feedback flagged excessive complexity and reporting burden.
- The Amended ESRS achieve a 60.9% reduction in mandatory datapoints, 100% elimination of voluntary disclosures, and 55% shorter standards overall.
- EFRAG applied six simplification levers: simplified materiality assessment, eliminated duplication, emphasized fair presentation, clearer language, new reliefs, and IFRS S1/S2 alignment.
- The core framework remains unchanged: double materiality, governance, strategy and business model, and Policies, Actions and Targets (PAT) and metrics architecture are all retained.
- The European Commission will adopt a revised Delegated Act in 2026; companies should prepare for a principles-based framework requiring stronger judgement and materiality skills.
Why change was needed
The European Sustainability Reporting Standards (ESRS) were first adopted in 2023 under the Corporate Sustainability Reporting Directive (CSRD), representing the most comprehensive sustainability disclosure framework ever introduced in the EU. However, from the outset it became clear that the standards — while ambitious — placed a significant administrative burden on companies, particularly small and mid-sized entities and those earlier in their sustainability reporting journey. Early field tests and stakeholder feedback consistently flagged the sheer volume of required disclosures, the complexity of the double materiality assessment, and the weight of value chain data collection as the most challenging aspects of implementation.
The political and regulatory environment shifted significantly in early 2025. The European Commission published its Omnibus Proposal in February 2025, which included proposals to amend the CSRD itself — most notably to narrow its scope and extend phase-in timelines. Alongside this, the Commission mandated EFRAG to undertake a comprehensive simplification exercise of the ESRS, with the clear objective of making them shorter, clearer, and less burdensome without sacrificing the quality of information provided to investors and other users of sustainability information.
EFRAG responded swiftly and systematically. Between April and December 2025, the organisation conducted extensive stakeholder outreach, a public call for input, targeted field tests, and a formal public consultation. The resulting Amended ESRS were approved by EFRAG’s Sustainability Reporting Board on 28 November 2025 and the technical advice was delivered to the European Commission in December 2025.
| Key Fact The simplified ESRS achieve a 60.9% reduction in mandatory datapoints, a 100% elimination of voluntary datapoints, and an overall word count reduction of over 55% compared to the 2023 standards. |
Six Levers of Simplification
EFRAG’s simplification exercise was not simply a matter of deleting disclosures. It was structured around six distinct levers, each targeting a different dimension of the reporting burden:
1. Simplification of the Double Materiality Assessment
The double materiality assessment (DMA) is streamlined. The updated standard acknowledges a ‘top-down’ approach and clarifies that it is not mandatory to perform the assessment at an Impact, Risk and Opportunity (IRO) level, especially for topics which are obvious considering the business model and value chain of a company.
Clearer guidance is introduced and documentation requirements are reduced. The concept of ‘gross versus net’ assessment — allowing companies to consider implemented actions when evaluating impacts — is clarified to a certain extent. A concept of ‘inherent impact’ is introduced to consider and include relevant material topic in the sector irrespective of management effectiveness.
2. Eliminating duplication and redistribution between ESRS 2 and topical standards
One of the most structurally significant changes is a critical redistribution of content between the general standards (ESRS 1 and 2) and the topical standards. Most granular narrative requirements that had been duplicated across the topical standards are now deleted, with topical standards now pointing to the general disclosure requirements (GDRs) in ESRS 2. This eliminates unnecessary repetition and creates a cleaner architecture.
3. Emphasising fair presentation and readability
The Amended ESRS place greater emphasis on the principle of fair presentation — a stronger filter on relevance and materiality, designed to move companies away from compliance-heavy tick-box reporting towards genuinely informative disclosures. Voluntary disclosures have been entirely eliminated to avoid the implicit pressure to report everything.
4. Improved understandability, clarity and accessibility
The language of the standards has been simplified, concepts clarified, and the overall text substantially shortened. Application requirements (ARs) have been focused on genuinely necessary methodological guidance, with peripheral or duplicative guidance removed.
5. Introduction of burden reduction reliefs
New reliefs and flexibilities have been incorporated throughout the standards. Notably, companies are not required to report information where doing so would require ‘undue cost or effort’. Phase-in provisions have been used strategically for the most challenging disclosures — for example, quantitative anticipated financial effects are phased in until 2029. Acquisitions and divestments during a reporting period can be excluded from the sustainability statements in the year of acquisition or disposal.
6. Enhanced interoperability with IFRS Sustainability Standards
Considerable effort has been invested in aligning ESRS with the IFRS Sustainability Disclosure Standards (IFRS S1 and S2), published by the International Sustainability Standards Board (ISSB). Language has been aligned where possible, IFRS reliefs implemented, and the GHG emissions reporting boundary in ESRS E1 has been updated to align with the financial control approach in the GHG Protocol — bringing it into line with IFRS S2. Companies intending dual compliance should note that some ESRS reliefs go beyond those in ISSB standards.
The scale of change: by the Numbers
The headline reduction figures are striking. Mandatory datapoints have been cut by 60.9%%. All voluntary datapoints have been eliminated entirely. Counting both categories together, the total number of datapoints has been reduced by 68%. The overall length of the standards has been reduced by more than 55%.
| Scope Note The simplification exercise assumes the CSRD will be amended in line with the Omnibus Proposal. The Amended ESRS are calibrated to the revised scope and timelines expected from that legislative change. Companies should monitor the progress of the Omnibus legislation closely. |
What remains unchanged
It is important to emphasise what the simplification exercise does not do. It does not remove the fundamental obligation to report on material sustainability topics. It does not eliminate the double materiality assessment. It does not undermine the credibility or ambition of EU sustainability disclosure requirements. The core architecture — strategy and business model disclosure, governance, materiality assessment, policies, actions, targets and metrics — remains intact.
Requirements that are rooted in the CSRD itself (Level 1 regulation) could not be changed by EFRAG and were left untouched. Similarly, the value chain reporting framework for financial institutions was outside the scope of this exercise.
What comes next
EFRAG’s technical advice has been delivered to the European Commission, which will now use it to prepare a Delegated Act revising the first ESRS set. Once adopted, companies will be required to report under the Amended ESRS. EFRAG will support implementation through updated guidance, a refreshed Q&A platform, and educational materials.
The ESRS Knowledge Hub, launched on 4 December 2025, serves as a central navigation tool for all ESRS-related resources.
For reporting companies, the simplification represents a genuine relief — but also a call to action. The reduced datapoint count and clearer principles-based framework place greater emphasis on judgement, materiality assessment quality, and narrative coherence. Companies that invest now in robust processes and skilled teams will be well placed to produce sustainability statements that are both compliant and genuinely useful to their stakeholders.
Still have questions or want to know how we can support, reach out at nishant@tomorrowworks.eu