Exposure Draft of the amended ESRS

1. Background and objective of the amendments

On July 31, 2025, EFRAG published an amended version of the European Sustainability Reporting Standards (ESRS) in the form of an exposure draft (hereinafter referred to as “ESRS ED”). The ESRS specify and detail the requirements of the CSRD (Corporate Sustainability Reporting Directive).
In the accounting world, an exposure draft contains standards that are almost finalized and are being put out for public consultation for the last time. However, it should be noted that 1. changes may still be made to the ESRS ED standards through public consultation, 2. the European Commission reserves the right to make further changes, and 3. the European Council and the European Parliament must approve the standards before they can be adopted.
The amendments of the European sustainability reporting standards by EFRAG follows the European Commission’s political approach to simplifying reporting requirements for companies (“Omnibus Process”). The aim is to significantly reduce the reporting burden without abandoning the core objectives of sustainability regulation.
EFRAG will conduct the consultation until September 29 before submitting its final proposals to the EU Commission in November.

2. Key changes and new priorities

• Data points and scope: According to EFRAG, the number of mandatory data points has been reduced by 57%, and by as much as 68% when voluntary disclosures are included. The length of the standards has also been reduced by approximately 55%.
• Materiality filter & simplifications: In future, companies will only have to provide information that is “available without disproportionate cost and effort.” The materiality filter and the associated requirements have been significantly simplified and better explained.
• Value chain: In future, disclosure of environmental and social indicators along the entire value chain will be largely dispensed with – with the exception of important Scope 3 greenhouse gas emissions.
• Clarification of impacts: The requirements for quantifying financial impacts have been reduced. At the same time, the distinction between material impacts, risks, and opportunities has been clarified in order to reduce boilerplate and duplicate documentation.
• Standardized structure: The focus of disclosure is on strategies, policies, measures, and targets, summarized and concentrated in ESRS 2 (Cross-cutting Standard).

3. General Disclosure Requirements (GDR)

The revision of the ESRS introduced the concept of General Disclosure Requirements (GDR) for the first time. GDRs serve as an overarching framework for all reporting companies and are intended to standardize and structure disclosure requirements on core topics across the various sustainability areas. The GDRs serve a bundling function and replace many previous individual requirements in the thematic standards with a commonly applicable standard framework.
This simplifies reporting: companies no longer have to provide the requested key information multiple times in each individual category, but rather according to clearly defined, general criteria. Examples include standardized disclosures on governance, strategy, and objectives in relation to material sustainability topics. The GDR are intended in particular to improve the consistency and comparability of sustainability reports, reduce unnecessary repetition, and simplify internal compliance with reporting requirements. The structured GDR approach is considered one of the most important technical simplifications in the new ESRS and has therefore met with broad approval among users and auditors.

4. Our final assessment

It could have been worse! The amendments to the ESRS are largely sensible: the core integrity of the standards remains intact, and key requirements such as climate transition plans and compliance with the UN Guiding Principles on Business and Human Rights have been retained. The reduced complexity will be seen by many companies as a significant relief, and the new standards address redundant or duplicate reporting requirements and enable more practical access to reporting.

The amended ESRS strike a balance between the desire to define a still ambitious approach to sustainability reporting and the political mandate to reduce excessive bureaucratic burdens on companies.

There is a broad consensus among experts that technical simplifications to the ESRS should begin at the technical level and not be implemented across the board through purely political intervention. 

However, much more important than the now amended ESRS are the thresholds for CSRD obligations for companies, which are ultimately to be decided by the European Parliament and the European Council.

If, for example, a threshold of >5,000 employees is adopted for the reporting obligation under CSRD, as demanded by some members of the European Parliament, then it will no longer matter how granular or detailed the future ESRS will be, because then practically only large international corporations will be required to report under CSRD. However, companies of this size did not have any significant problems with the original ESRS either.

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