EFRAG Moves to Simplify EU Sustainability Reporting

The European Financial Reporting Advisory Group plans to simplify reporting under the European Union’s Corporate Sustainability Reporting Directive, Ropes & Gray writes on its website. As part of the Omnibus process, EFRAG was tasked with delivering technical advice to the EU on the European Sustainability Reporting Standards (ESRS) by the end of October 2025. 

In a progress report to the European Commission dated June 20, 2025, EFRAG outlined major simplifications to the ESRS, foreshadowing a more streamlined and pragmatic approach to sustainability disclosures.

At the heart of the reform is a proposed 50%+ reduction in the number of ESRS datapoints, a move prompted by growing concerns among companies and EU member states about the overwhelming reporting burden. 

EFRAG plans to eliminate less relevant qualitative and quantitative datapoints and shift others to non-mandatory guidance. Narrative disclosures about policies, actions, and targets (PAT) will become less granular, and the placement of voluntary content will be more clearly distinguished from mandatory requirements.

EFRAG further aims to simplify the complex double materiality assessment process. It proposes a top-down, business model-first approach that emphasizes relevance and decision usefulness, introduces a materiality filter for all data points, and clarifies what constitutes necessary evidence and the scope of reporting. Minimum disclosure requirements and topical disclosures are also being streamlined. 

PAT disclosures will focus only on material topics, duplication will be minimized, and companies will no longer be required to justify the absence of certain PATs. The inclusion of executive summaries and appendices is encouraged to enhance report readability, while detailed metrics and EU taxonomy data can be placed in designated sections.

While EFRAG remains on schedule to meet the deadline at the end of October, it recommends extending the public comment period. Ongoing Omnibus negotiations could still reshape the final framework before the European Commission receives EFRAG’s technical advice on simplifying European Union sustainability reporting.