| PHASE 1 | PHASE 2 | TRANSITION PHASE | |||
| Determination of simplification measures: April – May 2025 | Collection of input material: April – May 2025 | Preparation of consultation draft: May – July 2025 | Public consultation on the draft standards: August – September 2025 | Final submission to the European Commission: October 2025 |
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| Source: EFRAG’s work plan for the simplification of ESRS. Presented to the JURI Committee in the European Parliament on 5 June. – efrag.org | |||||
The European Commission has stated that this should be addressed as quickly as possible and no later than six months after the adoption of changes resulting from the omnibus (see illustration below).
Simplification measures
EFRAG highlights, among other things, the following simplification measures:
Simplification of the double materiality assessment (DMA)
- More focus on the outcome of the process than the process itself: The complexity of the process is to be reduced to avoid unnecessary assessments. It is clarified that a DMA typically begins with an analysis of the business model to identify the most obvious material topics. This will also have implications for the documentation of the outcome of the assessment.
- Clearer focus on materiality and ensuring that the information is decision-useful. The materiality assessment should apply to all data points, including those in ESRS 2 General Disclosures.
- Improved guidance on the interplay between impacts, risks and opportunities (IROs) and the assessment of material topics, better guidance on how risk-mitigating measures are taken into account, and how to define positive impacts.
- Relevance and credibility are emphasised to avoid redundant and rule-driven reporting.
Improved readability and integration into corporate reporting
Experiences from submitted ESRS reports so far have shown that many are overly detailed and lack user-friendliness. They often mix material and immaterial information, making it difficult for companies to effectively tell their own story. There is a clear desire for more flexible reporting, including the option to present a summary of material information at the beginning and to provide additional details in appendices. Emphasis should also be placed on avoiding unnecessary repetition of information throughout the report.
Changes to mandatory disclosure requirements and structure
The structure of the standards, which require disclosures on policies, actions, and targets (PAT) both in the overarching standard (ESRS 2) and in the topic-specific standards, has made implementation complex. Several disclosure requirements related to PAT have also been overly detailed. EFRAG has announced various measures to improve this, including a significant reduction in mandatory PAT-related disclosures. One of the proposed improvements is the introduction of a clearer distinction between mandatory requirements and voluntary guidance.
Relaxation of Disclosure Requirements
Additional relief measures are being considered for disclosure requirements perceived as burdensome. For example, simplifications are proposed for disclosures in situations involving organisational changes, as well as for measurement parameters where the necessary input data is unavailable. Relief is also being considered for the requirement to disclose expected financial impacts.
Enhanced Coordination
EFRAG is exploring all opportunities for enhanced coordination with other standards, particularly with the sustainability standards issued by the International Sustainability Standards Board (ISSB). Further alignment with the reporting boundaries defined in the GHG Protocol is also being considered.
Reduction in Mandatory Data Points
EFRAG has reviewed all ESRS requirements with the aim of reducing the number of mandatory data points, focusing on eliminating those that are not material to users or offer limited added value. In addition, the planned simplifications mentioned above will contribute to further reductions. EFRAG expects this to result in a significant decrease in mandatory data points, with a target reduction of more than 50%.
Next Steps
The simplifications introduced in the ESRS are of particular interest to companies that will be subject to mandatory reporting. However, the final scope of reporting obligations remains undecided. As previously proposed by the European Commission, the thresholds would be raised so that only large undertakings with more than 1,000 employees would be required to report under the CSRD/ESRS.Negotiations are still ongoing within the European Parliament and the Council of the European Union. A final decision on the reporting boundaries is expected following trilogue discussions, but as of now, the outcome remains uncertain.
No final timeline for clarification has been set. However, several sources suggest that a conclusion may be reached during the course of 2025.
The timeline below outlines key milestones related to the Omnibus proposal, including the proposal for simplified ESRS and the adoption of the “Stop-the-clock” and “Content Directive”. It is important to note that some of the dates are preliminary estimates and may be subject to change.
| 'February 2025 | 'April 2025 | '31. October 2025 | '31. December 2025 (estimated) | 'No later than six months after the entry into force of the Omnibus proposal |
| The European Commission presented the Omnibus proposal | Adoption of the “Stop-the-Clock” Directive, which postpones the reporting timeline for Wave 2 and Wave 3 companies | EFRAG’s proposal to simplify the ESRS was submitted to the European Commission | Adoption of the “Content Directive” (including thresholds for reporting obligations under the CSRD) | Adoption of the simplified ESRS by the European Commission through a delegated act |