The EU’s Omnibus simplification efforts hit another milestone as EFRAG completed their work on the new European Sustainability Reporting Standards (ESRS). As part of the EU’s efforts to scale back mandatory sustainability reporting, the EU Commission ordered EFRAG to overhaul the ESRS by reducing required data points and simplifying the standards. After several months of work behind closed doors, we finally have the new ESRS exposure drafts. The cuts are deep and in line with expectations. A recent Ropes & Gray memo discusses key changes:
- “The changes include streamlining the double materiality assessment, reducing overlaps across standards, clarifying language and structure and removing all voluntary disclosures.
- New relief mechanisms also have been introduced, such as exemptions where reporting would cause undue cost or effort.
- In total, mandatory datapoints have been cut by 57%, and the full set of disclosures – mandatory and voluntary – reduced by 68%.
The overall length of the standards has been shortened by over 55%.”
While it is impossible to shorten the ESRS by 55% and maintain all substantive portions, there is some good news. Anyone familiar with the ESRS knows how unruly and vague the original standards were. A major focus of the overhaul was simplification. Many passages were reworked to reduce overlapping disclosure requirements and clear up language, making the requirements more direct and understandable. Additionally, the revisions were made with interoperability in mind, making it easier to align CSRD reporting with IFRS reporting. The new standards are currently open to public consultation until November 30, and are expected to be officially adopted next year.
Our members can learn more about CSRD disclosures here.
Members also save hours of research and reading time each week by using our filtered and curated library of ESG/sustainability resources covering over 100 sustainability subject areas – updated daily with practical and credible information compiled without the use of AI.
If you’re not already a member, sign up now and take advantage of our no-risk “100-Day Promise” – during the first 100 days as an activated member, you may cancel for any reason and receive a full refund. But it will probably pay for itself before then.
Practical Guidance for Companies, Curated for Clarity.
