On July 31, 2025, the European Financial Reporting Advisory Group (EFRAG) released the draft revisions of the European Sustainability Reporting Standards (ESRS Set 1), opening a public consultation period through September 29, 2025. In the context of the European Commission’s February 2025 ‘Omnibus’ package, EFRAG has been mandated to finalize the revised ESRS by 30 November 2025.
Responding to feedback from the first wave of CSRD implementation in accordance with the mandate from the European Commission, EFRAG has proposed a significantly streamlined version of the ESRS. The revision aims to ease the administrative burden on companies while preserving the core objectives of the EU Green Deal.
The new draft reduces mandatory data points (if material) by 57%, cuts the total number of disclosures—both mandatory and voluntary—by 68%, and shortens the overall length of the standards by more than 55%. The objective is to make sustainability reporting more proportionate and accessible, particularly for first-time reporters, without compromising the goal of building a climate-neutral and sustainable European economy by 2050.
What’s included in the draft release:
- Revised ESRS 1 (General Requirements) and ESRS 2 (General Disclosures)
- Updated versions of all 10 topical standards (Environment, Social, Governance)
- A set of supporting materials, including:
- Implementation guidance
- Summaries of changes for each standard (amendment logs)
Access the full set here: EFRAG Documentation Portal
Official Press Release: EFRAG
Simplification of the Double Materiality Assessment (DMA)
The updated draft introduces a new section outlining “practical considerations” to support companies in carrying out the DMA more effectively. The role of materiality is also clarified, reinforcing its function as the overarching filter for determining which information should be included in the CSRD sustainability statement.
New guidance has been added to help assess materiality in light of existing mitigation, remediation or prevention actions and policies—addressing the so-called “gross versus net” issue. The relationship between the identification of material impacts, risks and opportunities (IROs) and the structure of the reporting topics and sub-topics has also been addressed.
The terminology has been updated: the term “material matter” is replaced with “topic to be reported in relation to material IROs,” underlining that a topic is not inherently material—its materiality depends on the specific IROs associated with it.
Better readability and conciseness of the sustainability statements
Companies may now include EU Taxonomy-related disclosures in a dedicated appendix to the sustainability statement, helping to separate complex regulatory data from the core narrative. Similarly, highly granular information, such as detailed metrics, may be placed in a distinct section or appendix to improve readability and focus. In addition, disclosures on non-material matters—while optional—can also be included in an appendix, allowing companies to provide context without overloading the main report.
Elimination of the overlaps between general disclosures and topical standards
The revised draft renames the ESRS 2 “Minimum Disclosure Requirements” to “General Disclosure Requirements” (GDR) to better reflect their purpose and broaden applicability. In addition to the renaming, the number of required data points has been reduced.
Across the topical standards, disclosures related to policies, actions and targets (PATs) have also been scaled back, limiting them to those required for understanding a company’s sustainability approach.
Improved understandability, clarity and accessibility of the ESRS standards
The previous category of ‘may / voluntary’ disclosures has been removed.
Besides that, application requirements will no longer be presented in a separate section; instead, they will appear directly below the corresponding disclosure requirements within each standard.
Additionally, EFRAG proposes the introduction of new non-mandatory implementation guidance, which may be published either as appendices to the delegated act or as standalone documents, subject to the European Commission’s decision. This guidance aims to support consistent interpretation without adding to compliance burdens.
Introduction of several burden-reduction reliefs
Companies may report on a partial scope of the reporting boundary where reliable data cannot be obtained without undue cost or effort, for both owned operations and value chain metrics—provided they disclose how they plan to improve coverage over time.
The draft also removes the preference for direct data in value chain disclosures, allowing the use of either direct data or estimates, depending on reliability and practicability. Additional reliefs permit companies to exclude immaterial activities from metric calculations and omit joint operations without operational control from environmental metrics (except for E1 climate).
A one-year grace period has been introduced for business acquisitions and disposals to integrate such changes into sustainability reporting.
Enhanced interoperability with global reporting standards
The revised ESRS aligns more closely with IFRS S1 and S2, adopting common language and provisions to improve global consistency and reduce duplication for cross-framework reporters.
To more closely align with IFRS S2 and the GHG Protocol, ESRS E1 (Climate Change) requires organizations to disclose greenhouse gas emissions using the financial control approach. If the financial control approach fails to convey a fair presentation of the emissions, Scope 1 and Scope 2 shall be disclosed separately following the operational control approach.
The draft also introduces reliefs for disclosing anticipated financial effects, aligned with IFRS S1.
Outlook
These updates and simplifications are not final yet. Stakeholders are now encouraged to review and respond to the draft through EFRAG’s public consultation, open until 29 September 2025. Following the consultation, EFRAG will submit its final technical advice—the revised ESRS—to the European Commission by 30 November 2025.
The Commission will then review the submission and may make further adjustments before adopting the revised standards through a delegated act, which will also specify their effective date. Final adoption is expected to align with the conclusion of negotiations on the proposed amendments to the Corporate Sustainability Reporting Directive (CSRD).
The European Commission has indicated that the review and simplification of both the ESRS and the CSRD amendments will be completed in time for application to financial year 2027.
