EFRAG Provides Technical Advice to the European Commission on Simplified ESRS

Dec 19, 2025

by Diana Radovan, Global Electronics Association Sustainability Policy Director

The European Financial Reporting Advisory Group (EFRAG) has submitted its technical advice to the European Commission (EC) on the draft simplified European Sustainability Reporting Standards (ESRS). This is a key step in the Omnibus package, released in February 2025, after a call from stakeholders and ‘wave 1’ companies that ESRS were unnecessarily complicated and a huge burden for companies.

Our position

We welcome the ESRS revision by EFRAG and the timely provision of technical advice to the EC. As the revisions are very significant, it is too early to fully understand their impact on reducing reporting burden. Without having seen the final legal text adopted through a delegated act by the EC (pending in early 2026), we anticipate that reporting will still remain a significant effort for companies. However, we support the EC’s goal of achieving ESRS simplification, especially regarding the simplification Double Materiality Assessment (DMA) and the increased inter-operability of standards.

Background

Since the Corporate Sustainability Reporting Directive (CSRD) came into force on 1 January 2023, there have been increasing demands in the European Union to streamline the requirements and reduce the reporting burden associated with sustainability reporting. In November 2024, the EC announced its intention to introduce a proposal to amend three key pillars of the European Green Deal through an Omnibus package: CSRD, the Corporate Sustainability Due Diligence Directive (CSDDD) and the Taxonomy Regulation. The Omnibus package, released in February 2025, has resulted in several sets of proposals to date – revising the existing ESRS is one element of the proposals. For this, the EFRAG have been tasked by the European Commission to provide technical advice for the adoption of a delegated act to revise and simplify the existing ESRS. On 31 July 2025, EFRAG issued Exposure Drafts (EDs) revising all 12 existing ESRS, with a 60-day public consultation period. On 3 December 2025, after considering consultation feedback, EFRAG submitted its technical advice to the European Commission (EC) on the draft simplified ESRS.

Summary of modifications

To simplify the ESRS without compromising the objectives of the EU Green deal, the EFRAG revisions to the ESRS focused on several key simplification areas. This summary is not an exhaustive list.

Areas of simplification

Area	Simplification
DMA simplification	Reduces overall complexity of the DMA process by clarifying that the DMA can be a ‘top-down’ approach and that the expected level of evidence to support conclusions should be reasonable and proportionate Introduces the filter of information materiality for all datapoints Introduces a section called ‘Practical considerations in determining the material impacts, risks and opportunities and their related topics to be reported’ Replaces the term ‘material matters’ in certain places to emphasize that impacts, risks and opportunities (IROs) are material and the topics are ‘to be reported on’ Clarifies the following: the interaction between the identification of material IROs and the assessment of material topics and sub-topics the list of topics in ESRS 1, AR 16 (now relocated to Appendix A) are non-mandatory the expected level of granularity (aggregation or disaggregation) in reporting Addresses how mitigation, prevention, and remediation actions are considered in assessing an impact for materiality Clarifies that if only a sub-topic is material, this does not trigger reporting on all datapoints in the relevant topical standard Places additional emphasis on the objective of fair presentation, consistent with the IFRS Sustainability Disclosure Standards (IFRS SDS)
Better readability/conciseness of the sustainability statements and better inclusion in corporate reporting as a whole	Provides the option to have an ‘executive summary’ at the beginning of the sustainability statement Provides the option to disclose the most granular information in a dedicated section or appendix Clarifies that entities can present EU Taxonomy-related information in a specific appendix Allows entities to present additional information on non-material matters in dedicated sections or appendices
Critical modification of the relationship between Minimum Disclosure Requirements (MDRs) and topical specifications	To address the overlap between mandatory datapoints in topical standards and MDRs for policies, actions and targets (PATs) in ESRS 2 ‘General disclosures’, the revisions streamline the ESRS 2 MDRs for PATs and rename them General Disclosure Requirements (GDRs)
Improved understandability, clarity and accessibility of the Standards	Removes voluntary disclosures (‘may’ disclosures) Amends the general structure of the Standards to clearly separate mandatory and non-mandatory content
Introduction of other suggested burden-reduction reliefs	Introduces relief for acquisitions and disposals based on pragmatism and availability of data Introduces reliefs related to the use of ‘reasonable and supportable information that is available without undue cost or effort,’ similar to those in IFRS S1 ‘General Requirements for Disclosure of Sustainability-related Financial Information’ – the scope of these reliefs is broader than IFRS S1 as it includes all metrics and the value chain Removes the preference for direct data over estimates from counterparts in the value chain Introduces relief for the anticipated financial effects disclosure, similar to that available for IFRS S1 Introduces relief for metrics due to lack of data Introduces relief for metrics when activities are not drivers of material IROs Introduces a generic relief allowing for omission of information if prohibited under certain laws Includes the update on phase-in provisions granted in the ‘quick-fix’ amendments
Increased inter-operability	Introduces many editorial and substantial adjustments to bring the ESRS in line with the IFRS SDS. This includes the fair presentation and undue cost and effort items noted above, among many others

‘Bottom-up’ review of all datapoints

EFRAG’s data gathering efforts showed that companies found narrative datapoints to be too granular, preferring a more principles-based approach, and that many datapoints could be removed without an impact on the quality of data and information. Therefore, EFRAG has cut mandatory datapoints by 61% and eliminated voluntary disclosures, resulting in a 70% reduction in the full disclosures set. Revisions that reflect a less granular approach to narrative disclosures for PATs and eliminating the least relevant datapoints, i.e. those not directly meeting the disclosure objectives.

Next steps

As next step, the EC needs to adopt a new Delegated Act revising the first set of ESRS based on EFRAG’s technical advice, in order for this to be transposed into legislation.

Contact

For more information, contact me at DianaRadovan@electronics.org.