The EU’s rework of the CSRD is nearly complete. After the omnibus reform package met final approval earlier this year, the simplified European Sustainability Reporting Standards (ESRS) were the last outstanding item. The European Commission officially adopted the simplified ESRS last Friday. The final version of the ESRS are largely in line with drafts released in May and substantially reduce the mandatory datapoints required in CSRD disclosures. The European Commission writes in a press release:
“The revised standards aim to reduce administrative burdens for EU businesses while maintaining high‑quality disclosures. They build on the Omnibus I simplification package, which streamlined sustainability reporting in the EU and reduced the number of companies within the scope of the Corporate Sustainability Reporting Directive (CSRD).
The revised ESRS are shorter and clearer, introduce new flexibilities, and streamline key processes. They reduce the number of mandatory datapoints by over 60% and the total number of datapoints by more than 70%. Together, these changes are expected to lower reporting costs by over 30% per company.”
For a brief period, it looked like the EU might shake up sustainability reporting substantially with the simplified ESRS. A proposal floated earlier this year would have seen reports bifurcated into ISSB-aligned financial disclosures and impact disclosures. Ultimately, this is not the approach the EU settled on, and the new ESRS will be very familiar to those already reporting under the CSRD. Now the EU Parliament and Council have two months to review the new standards. Barring intervention in that two-month period, the new ESRS will enter force after the waiting period.
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