CSRD: EFRAG Simplifies ESRS – Key Changes and Recommended Actions

On July 31, 2025, EFRAG published revised and simplified Exposure Drafts of the European Sustainability Reporting Standards (ESRS), launching a 60-day public consultation open until September 29, 2025. The update follows the European Commission’s March 2025 request to simplify the ESRS adopted in 2023 under the Omnibus initiative. The goal: make CSRD reporting more manageable while staying aligned with the European Green Deal.  

Based on over 800 survey responses and stakeholder engagements, EFRAG applied six simplification levers and a detailed review of all data points. 

The new drafts cut mandatory data points by 57%, reduce total disclosures by 68%, and make the standards 55% shorter. 

Key Changes  

Below is an overview of the main changes, breaking down the biggest changes and what they mean for companies.  

1.Simpler Double Materiality Assessment:  

Double materiality assessments now start from the business model and can use top-down or bottom-up approaches. Companies benefit from new practical shortcuts that reduce complexity, such as not needing to analyse every severity factor, prioritizing key geographies or business units for social topics, and the flexibility to cross-reference financial statements for monetary information.  

2.Less Is More –  Fewer and Clearer Requirements: 

Despite these reductions and simplifications, EFRAG emphasizes that robust data management and governance remain essential. Companies still need strong systems and controls to accurately collect, manage, and track ESG data over time to ensure reliable and compliant sustainability reporting. The simplification helps reduce reporting burden but does not diminish the importance of data quality and oversight. This approach aims to balance easing complexity with maintaining the integrity and usefulness of sustainability disclosures. 

3.Overall simplification: Easy to Read, Easy to Use

The overall simplification and flexibility in the revised ESRS include several key changes designed to make sustainability reporting more accessible and focused. Reports can now include executive summaries, with technical details moved to appendices. Policies, actions, and targets are grouped in one section to reduce repetition. Disclosures focus only on material topics, and there’s a clear distinction between mandatory and optional items. The updated standards are also better aligned with IFRS/ISSB (S1 and S2), easing integration for global firms. 

4.Cross-Cutting standards ESRS 1 and ESRS 2

The updated cross-cutting standards ESRS 1 and ESRS 2 improve clarity, reduce duplication, and create a more logical flow in sustainability disclosures. Governance reporting is now more concise and better structured. There is a clear distinction between explaining how sustainability issues shape strategy (SBM-3) and describing the process for identifying them (IRO-2). Guidance on when to aggregate data for risks, impacts and opportunities is more explicit making location-specific reporting easier where necessary. It is also simpler to link descriptions of impacts, risks or opportunities directly to related policies, targets and actions. Also, the General Disclosure Requirements, previously referred to as minimum requirements, are now clearly defined so companies know exactly what is expected for policies, actions, targets and metrics. 

5.ESRS Topical Standards

The revised ESRS topical standards bring some of the most substantial changes in the entire update, aimed at cutting complexity and eliminating duplication. Many disclosures are now consolidated into the cross-cutting ESRS 1 and ESRS 2 standards, and site-level reporting for environmental or social KPIs is no longer required. New reliefs give companies more flexibility, allowing them to protect sensitive information, use estimates or proxies, omit data where collection would cause undue cost or effort, and consolidate reporting boundaries such as for GHG inventories. 

• Environmental standards (E1–E5) see a 60–80% cut in data points, with most local or site-specific details for pollution, water, biodiversity, and ecosystems removed. Climate change reporting (E1) now centers on absolute GHG reduction targets aligned with the 1.5°C goal, streamlined transition plans, clearer guidance on scenario analysis, and a new metric for climate dependencies in line with IFRS S2. Other changes include a stronger focus on microplastics (E2), the removal of marine disclosures (E3), a sharper biodiversity focus on transition planning (E4), and a narrowed scope for resource use to product durability, recycled content, and material hazardous waste (E5).
• Social standards (S1–S4) have 53–64% fewer data points. Eight separate social disclosures are merged into a single human rights policy aligned with ISSB, while diversity, health and safety, and workforce metrics are condensed. Consumer safety is now the priority for S4, with many marketing- or product-related disclosures made optional.
• Governance (G1) is reduced by half, and its policies, actions, and targets section follows the same simplified structure now applied across all standards. 

Next steps

• Public consultation open until 29 September 2025
• EFRAG hosting outreach events in September and October
• Final revisions and simplification to be submitted to the European Commission by 30 November 2025  

Recommended Actions 

 If your company is already in its 2nd reporting year: 

• Align with the simplification’s intent 
• Focus on managing Impacts, Risks and Opportunities (IROs) 
• Link IROs directly to actions, metrics, KPIs and performance 

For companies with a two-year delay:

• The threshold is still in discussion and not defined yet for which companies are in scope and which not
• Begin the double materiality assessment now, using the revised drafts as guidance
• Build data coverage, close reporting gaps, and integrate sustainability into your business strategy ahead of the FY2027 deadline 

cleversoft services  

Our CSRD service is designed to help you navigate both the current requirements and upcoming changes with confidence. With our software you will benefit from a service that​ 

• Considers the unique needs of the financial industry​
• Focusеs on assets and securities from the Value Chain​
• Provides regulatory guarantee​ 

Whether you are already in your second reporting year or preparing ahead of the two-year delay, we ensure you meet compliance requirements efficiently while keeping your focus on creating high-quality and regulatory compliant disclosures. 

Contact us to discuss how the ESRS simplifications impact your next sustainability report!