As the Omnibus process rolls forward with trilouges, the European Financial Reporting Advisory Group (EFRAG) has advanced new draft European Sustainability Reporting Standards (ESRS). These draft standards, which are separate from the omnibus simplification, drastically reduce the number of required disclosures under the Corporate Sustainability Reporting Directive (CSRD). A recent Gibson Dunn memo discusses the reduction in disclosures:
“According to EFRAG, mandatory datapoints have been reduced in the simplified ESRS by 61 %, and all voluntary datapoints have been removed, making the standards shorter, more accessible, and more coherent.”
The new draft standards follow the ESRS exposure drafts published last summer. They also exceed the original draft’s reductions. In addition to a reduction in the number of mandatory data points, the new drafts also seek to simplify the double materiality assessment process by eliminating certain documentation requirements. The new drafts also target further interoperability with ISSB standards.
However, the memo warns that in some areas, the ISSB will require more datapoints than the new ESRS. This adds a wrinkle to interoperability. Under the previous standards, the ESRS was considered more robust, meaning that a CSRD-compliant company would have all the necessary data for ISSB disclosures. Under the new drafts, companies engaged in CSRD and ISSB reporting would need to fill gaps in both frameworks. The draft standards now go to the European Commission for review and incorporation into a delegated act. The European Parliament and Council will have the opportunity to review the delegated act, but absent any challenges it will come into effect two months after its introduction.
The rollercoaster ride ain’t over yet…
Full access members can learn more about the CSRD here.
Interested in a full membership with access to the complete range of benefits and resources? 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. 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.
Practical Guidance for Companies, Curated for Clarity.
