Simplified ESRS: what changes will they bring to corporate sustainability reporting?

EFRAG publishes the simplified ESRS: key updates for sustainability reporting

EFRAG has released the new simplified ESRS standards, aimed at making sustainability reporting more manageable and practical for obligated companies. The changes are designed to reduce the operational burden and support competitiveness, without compromising the central goal of the Green Deal: promoting sustainability within the European Union.

Why the ESRS have been simplified

The purpose of the revision is to ease reporting requirements while ensuring that disclosures remain useful, proportionate and aligned with European objectives.
The simplification provides clearer guidance and reduces the complexity of the information required from companies.

Key updates in the simplified ESRS

According to the document published by EFRAG, the updates introduce several important changes to sustainability reporting.

1. Standard structure confirmed
   The overall structure of the ESRS remains unchanged and continues to include:
   • 2 cross-cutting standards (ESRS 1 and ESRS 2)
   • 5 environmental standards (E1–E5)
   • 4 social standards (S1–S4)
   • 1 governance standard (G1)
2. Simplified double materiality assessment
   The double materiality assessment will be easier to perform thanks to clearer guidance provided by EFRAG.
3. Reduced pressure on the value chain
   The pressure related to collecting and disclosing value chain data is reduced, easing one of the most demanding areas for companies.
4. Significant reduction in required datapoints
   The standards introduce a 61% reduction in required datapoints (when material) and eliminate voluntary disclosures.
5. Greater proportionality and phased implementation
   A phased-in approach is foreseen for the most complex disclosures, offering companies greater proportionality in the application of the standards.

Next steps

The European Commission will prepare a delegated act to update the first set of ESRS on the basis of EFRAG’s published drafts.
EFRAG will release operational guidelines, Q&A and supporting materials to facilitate the adoption of the standards by companies.

Would you like to understand how to implement the simplified ESRS?

Pegaso Management supports companies in ESG reporting in a compliant and effective way.