What the amended ESRS mean for your business

EFRAG released the Exposure Drafts of the simplified and revised ESRS on 31 July 2025. These Exposure Drafts are part of the European Commission’s February 2025 ‘Omnibus’ package, aiming to simplify EU reporting rules under the European Green Deal. 

After public consultation, EFRAG will deliver the simplified and revised ESRS to the European Commission by the end of November 2025. The Commission may make further changes as part of their review before drafting a legislative proposal to amend the ESRS Delegated Act. This act will become effective in CSRD-transposing jurisdictions without additional national legislation. Currently the European Commission is expected to adopt the delegated act by mid-2026 at the latest, in time for companies to apply the revised standards for reporting on financial year 2027 – with a potential option to apply them from 2026 onwards.

EFRAG highlights that the amended ESRS Exposure Drafts offer a  57 percent reduction in mandatory datapoints, a simplified Double Materiality Assessment (DMA), and improved readability. But, what does this mean in practice?

Is the mandatory reporting effort really reduced by 57 percent?

From our interactions with clients, we have seen that the proposed 57 percent reduction in mandatory datapoints (and 68% reduction in total datapoints, when including voluntary datapoints) does not necessarily translate into a 57 percent reduction in reporting effort. The actual reporting effort reduction is expected to be significantly lower and varies by company – depending on the number of material topics, datapoint complexity, and reporting maturity, amongst other factors. In the short to mid-term, significant effort remains in assessing how the changes in individual datapoints affect a company.

Many of the deleted datapoints were voluntary or qualitative. Quantitative datapoints, which often require more effort, remain largely intact. The table below illustrates the datapoint changes.

Datapoint changes:

Qualitative disclosures are more impacted by the reduction than quantitative disclosures

EFRAG proposed to delete far more qualitative than quantitative datapoints, leaving many effort-intensive quantitative datapoints in place. For example, in ESRS G1 Business Conduct, certain voluntary qualitative disclosures about supplier payment practices have been deleted.

While the average invoice payment time metric has also been deleted, companies must still disclose material metrics like standard invoice payment terms in number of days and the number of legal proceedings outstanding.

In our experience, quantitative datapoints require more implementation effort than qualitative datapoints, given the definition setting, systems implementation, data collection, estimates, controls, and monitoring.

37% of deleted datapoints were voluntary datapoints

EFRAG removed all voluntary datapoints – either deleting them, making a few mandatory, or including them in a separate “Non-Mandatory Illustrative Guidance” document. This streamlines the reporting standards and simplifies companies’ efforts to navigate the new ESRS.

However, many Wave 1 reporters did not disclose voluntary datapoints, so deleting voluntary datapoints may not lead to a reduction in reporting effort.

Overlap removal: less standards, same effort?

Some datapoints were deleted to eliminate duplicative datapoints between standards. This shortens the ESRS and reduces duplicative disclosures in the CSRD Sustainability Statement. 

However, some datapoints deleted from the topical standards were either moved to or already existed in ESRS 2, meaning these deletions do not reduce the reporting effort for companies overall.

What does this mean? 

Companies in scope of the CSRD need to critically assess how the proposed amendments impact their reporting effort. This depends on the material topics in scope, the maturity of systems, the number and type of datapoints, and capabilities of the reporting function. Only after this assessment can organizations adequately determine the impact on a company’s remaining CSRD implementation steps and resource planning.

• How simplified is the Double Materiality Assessment in practice? EFRAG has introduced some helpful simplifications, including guidance on how to assess gross versus net impact when assessing the effects of remediation and mitigation measures on the materiality of negative impacts.  This clarification addresses confusion from the July 2023 ESRS version.
• From our client discussions, we have seen that the option to conduct a top-down assessment reduces documentation requirements, but does not significantly reduce the effort needed to conduct the DMA itself. This is good news for companies who have already completed a DMA, as they do not have to reinvent the wheel but can benefit from reliefs around documentation.
• The proposed removal of the sub-sub-topic level for the materiality assessment means companies can assess sustainability impacts, risks, and opportunities (IROs) at the topic (e.g., water) and subtopic (e.g., water consumption) levels. While this reduces the granularity of performing and documenting the DMA, IROs must still be sufficiently precise to scope material datapoints. If IROs are too high-level, it becomes difficult to formulate effective policies, actions, and targets.

What’s new regarding information materiality?

In the current ESRS, information materiality (used to determine which datapoints must be reported for a material topic) only applied to certain disclosures³ in the topical environmental, social and governance standards. In the Exposure Drafts, this concept now also applies to general disclosures in ESRS 2. Additionally, clarifications were added on how to aggregate and disaggregate disclosures.

We anticipate challenges in how this information materiality is applied in practice. For example, if information materiality applies to disclosures on policies, actions, and targets, can a company omit its response to a material topic and still claim fair presentation?

Improved readability of the ESRS and the sustainability statements 

While improved readability often lies in the eye of the reader, EFRAG has introduced several simplifications to enhance readability in the revised ESRS. 

The revised ESRS are clearer and less granular, with “may requirements” removed and Application Requirements placed directly next to disclosure requirements. This helps companies and practitioners interpret the standards and tell their sustainability story more effectively. 

Additional improvements include: 

• Eliminating overlaps in General Disclosure Requirements (GDR), minimizing the repetition of Policies, Actions and Targets (PATs) in different sections of the sustainability statement. 
• Permitting granular information, such as the EU Taxonomy, to be included in a dedicated section within the sustainability statement (e.g., an Appendix). 
• Aligning the definition of “own operations” with the perimeter of the related financial statements to better integrate financial with sustainability reporting. This is complemented by setting the financial control approach as the expected standard unless this does not lead to fair presentation (applies to E1 disclosure of GHG emissions only). 

Fair Presentation

ESRS 1 introduces the concept of fair presentation, emphasizing a “fair presentation” reporting framework rather than a focus on compliance. 

This aligns more closely with ISSB standards and requires companies to go beyond regulatory requirements when necessary to ensure a fair presentation.

However, this concept alone does not automatically reduce the number of datapoints or ease the reporting effort. The effort remains driven by the number and complexity of material topics.

In its article "Sustainability statements based on ESRS: “compliance” or “fair presentation”?", Accountancy Europe notes that the audit profession has a long history in auditing financial statements prepared based on fair presentation frameworks, like the IFRS. A fair presentation conclusion for sustainability assurance on ESRS sustainability reporting is possible, as International Standard on Sustainability Assurance (ISSA) 5000 General requirements for Sustainability Assurance Engagements allows for both sustainability assurance under compliance and fair presentation sustainability reporting frameworks⁴. However, while the ESRS introduced fair presentation, the CSRD itself does not, so inconsistencies like this would need to be resolved.

Immediate actions should center on navigating the evolving regulatory landscape, both for companies already subject to reporting requirements and those benefiting from the Omnibus provisions who must begin reporting from the 2027 financial year. The most significant implications of these changes are found in external sustainability reporting; however, as sustainability data increasingly informs business decisions, it is essential to approach regulatory updates with a strategic perspective. This means that companies should not only address compliance but also evaluate how adjustments in reporting can align with and support broader business objectives and long-term sustainability goals. Our most recent sustainability reporting study found that most companies⁵ are gaining value from sustainability reporting beyond compliance requirements. 

The revised ESRS mark a pivotal moment in the evolution of sustainability reporting. While simplification is the headline, the real story lies in how companies respond – strategically, not just procedurally. Whether you're a Wave 1 reporter refining your approach or a Wave 2 company preparing for your first CSRD disclosures, the opportunity is clear: sustainability reporting can be more than a regulatory exercise. It can be a lever for business transformation, stakeholder trust, and long-term value. 

We help you turn reporting obligations into strategic advantage. By connecting sustainability data to decision-making, risk management, and performance, we support organisations in building trust and delivering sustained outcomes. The amended ESRS are not the end of the journey – they’re a new chapter. Let’s write it together.

footnotes

_{^1. Numbers provided by EFRAG in the Basis for Conclusions
^2. Total reduction in datapoints (mandatory and voluntary) is referenced by EFRAG in the Basis for Conclusions to amount to 68%
^3. Information materiality did not apply to cross-cutting or PAT disclosures in the topical standards.
^4. Accountancy Europe
^5. From insight to value: The sustainability reporting journey continues
^6. What's material now? How CSRD is shaping double materiality outcomes
^7. In search of sustainable value: The CSRD journey begins}