ESRS Simplification: The Draft That Could Change Everything

A more focused standard, not a diluted one

EFRAG’s newly released draft of the “Amended ESRS” marks a potentially a pivotal moment for sustainability reporting across the EU. Amid concerns over complexity and implementation timelines, these updates might bring clarity and usability to the ESRS. In our opinion, the EU is refining, not retreating from, its sustainability ambitions.

Making Sense of the Numbers

Much of the attention is focused on the claim that 66% of the datapoints will been eliminated. This figure, while technically correct, needs context. The earlier ESRS documentation included more than 1,100 rows in guidance documents, but many of these were not quantitative datapoints. Instead, they were narrative prompts, yes/no flags, or structural cues to guide disclosure.

According to the current working draft, EFRAG would first remove all 277 “may disclose” items (i.e., voluntary datapoints), reducing the volume by roughly 25%. From there, the remaining reductions would largely be focused on eliminating duplication, clarifying expectations, and collapsing overlapping disclosure elements. Importantly, core metrics, such as GHG emissions or energy intensity, remain fully intact.

What Change could this bring to sustainability reporting?

1. A Leaner, More Practical Double Materiality Assessment

The double materiality methodology, central to CSRD compliance, might undergo significant simplification. Previously criticised by many for being overly procedural and rigid, the updated version shifts the emphasis from mapping processes to understanding and documenting outcomes. This shift not only reduces the administrative burden but also sharpens the strategic focus on materiality assessments.

2. Streamlined Policies, Actions and Targets (PAT) Requirements

Previously, PAT (Policies, Actions, and Targets) disclosures were built from a combination of minimum disclosure requirements in ESRS 2 and additional datapoints scattered across the topical standards. In the amended draft, these minimum disclosure requirements have been renamed to General Disclosure Requirements, and the number of extra datapoints originating from the topical standards has been significantly reduced. This will eliminates duplication and gives companies a clearer view of how to structure policy- and target-related content.

3. Use of Appendices for Granular Data

In response to preparer feedback, detailed technical tables, such as EU Taxonomy alignment data or location-specific environmental metrics, will be allowed to be placed in annexes rather than embedded in the core sustainability statement. This shift enhances readability and makes reports more useful to decision-makers, without sacrificing transparency.

4. Clearer Language and Guidance

The current working draft introduces cleaner language and improved structural flow. While not yet final, it suggests a shift toward aligning the standard with how sustainability teams operate in practice. The original ESRS was often criticized for being overly complex and geared toward legal interpretation. This version appears to be a usability upgrade for preparers and auditors alike.

EFRAG's Direction: Transparency Meets Pragmatism

While the headline might suggest a possible rollback, the reality is more nuanced. What we’re seeing is not a weakening of Europe’s ESG regulation, but a refinement aimed at ensuring successful adoption. The key disclosure elements that matter most to stakeholders, climate risk, supply chain resilience, and governance practices, remain untouched. Instead, the emphasis is on making the standards implementable across diverse industries and company sizes.

EFRAG is also planning to introduce additional flexibility, such as reduced granularity in narrative disclosures, a clearer relationship between general and topical standards, and a stronger alignment with international frameworks like ISSB.

What could this mean for you?

For companies reporting under CSRD, the amended ESRS draft offers a clearer path forward:

• Fewer duplicated disclosures and streamlined workflows
  
  
• Reduced time spent on administrative tasks, allowing more focus on strategy
  
  
• Improved internal alignment between sustainability, risk, and finance teams
  
  
• Better consistency with global frameworks, supporting multinational reporting efforts
  
  

But simplification does not mean optionality. The expectation remains: companies must engage with material sustainability risks and impacts, demonstrate how these are managed, and provide the data and narrative to support their claims.

Final Thoughts: Simplification Without Compromise

If the current draft evolves into an adopted framework, it could represent a major step forward, a more mature ESRS that promotes trust and enables strategic ESG integration. It will enable companies to move from reactive reporting toward strategic ESG integration. For practitioners, the task ahead is to embrace the simplified structure while keeping the quality of insight and data high.

At denxpert, we’re closely following every ESRS development to ensure our platform remains aligned with regulatory expectations. Our CSRD reporting software is continuously updated with the latest ESRS structure, and our expert team is ready to support you in interpreting and applying the new guidance.

Looking for tailored support in your ESRS implementation?
Explore our ESRS-ready reporting solution or contact our team for a demo.

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