The EU is simplifying and streamlining its requirements for sustainability reporting. It is doing so in two separate but complementary processes:
- Amending to the CSRD legislation itself through the Omnibus proposal. The changes include postponing the deadlines and limiting the scope to companies with 1000 (instead of 250) employees.
- Reducing the number and complexity of the datapoints to be reported on, as set out in the ESRS.
The simplification of the ESRS (b) is the focus of this blog post following the publication of the draft revised European Sustainability Reporting Standards (ESRS) on July 31st, 2025. These proposals have been developed by EFRAG, the EU’s independent reporting standard-setter.
What changes?
EFRAG aims to make reporting more decision-useful and proportionate by proposing the following changes to the ESRS:
- Reducing the number of mandatory datapoints by 57%. Most of reduction (77%) comes from the narrative datapoints.
- Streamlining the double materiality assessment (DMA). For example by analysing sector context first. When it is clear that a topic is material for its sector, the company can suffice with less evidence supporting the DMA.
- Simplifying wording and clarifying definitions.
- Introducing possibilities for exemptions, e.g. if disclosure causes excessive cost or effort.
- Clarifying thresholds for materiality in metrics.
- Allowing estimates for input for value chain metrics where practical and reliable.
- Aligning more closely with the GHG Protocol by using consolidated financial statements as the relevant boundary for E1 climate change reporting.
- Enhancing the interoperability with global frameworks such as ISSB.
Next steps
The draft ESRS are open for consultation until September 30th. After the consultation, EFRAG will revise and finalise the standards, submitting their final advice to the European Commission by November 30th.
The Commission is expected to adopt the revised standards in the first half of 2026 through a Delegated Act. While EFRAG provides technical advice, the Commission retains the ability to make additional changes during this process. Note also that the exact timing might be influenced by the CSRD revision process under the Omnibus proposal.
Our view
At Salacia, we welcome the proposals for making sustainability reporting more practical and less of an administrative burden. We believe that the current proposals will result in more understandable reports that highlight the most relevant information.
Our hope is that the clarity will also facilitate value chain communication on sustainability, including with companies with less than 1000 employees. This will determine the success of the CSRD and ESRS to truly stimulate more sustainable business practices.
We do call upon EFRAG and the European Commission to acknowledge that reducing the length of the ESRS should not be a goal in itself. Indeed, detailed (and therefore longer) ESRS might be more practical by being less ambiguous, especially on complex topics such as transition planning. The resulting reports would also be more consistent and therefore easier to compare.
What we recommend you to do
If the timeline holds, companies could receive final confirmation of their reporting requirements by mid-2026. However it is not yet clear when it will be mandatory to report on those datapoints. Our best estimate is that companies will be required to report using the new ESRS for the first time in 2028, reporting on the data from fiscal year 2027.
Our recommendations if you are in Wave 1 (reporting from 2026):
- Until revisions are formally adopted, companies must continue reporting under the current ESRS. That means stick with the current ESRS for now. Switching prematurely might carry compliance risks.
Our recommendations if you are in Wave 2 (reporting later):
- If adopted, start directly with the simplified ESRS from 2026 onward.
- In the meantime, start or continue with Climate (E1). The quantitative disclosures around Scope 1, 2, 3 GHG emissions remain largely unchanged. This is typically the most challenging topic for data collection and analysis. It often takes multiple years to set-up right.
- After Climate, continue with the simplified datapoints for Workforce (S1) en Water E3.
- Set up cooperation between your teams for sustainability, finance, and risk. The revised ESRS help to align sustainability and financial reporting, requiring more cross-functional coordination.
So, clarity is coming but don’t wait for every detail to be finalized. Early preparation, such as test-running simplified disclosures, will smooth the transition. By beginning to collecting data before mandatory deadlines, you’ll be prepared and confident when the real deadline comes. What’s more: your ESG data can provide valuable insights today, regardless of regulatory changes. For risk management, spotting opportunities, financing, and stakeholder trust.
How Salacia Supports You
Our approach is flexible: we will support both ESRS versions in parallel. That way, clients don’t need to choose between today’s compliance and tomorrow’s standards. Whether you are Wave 1 or Wave 2, we ensure smooth reporting today and readiness for simplified requirements when they arrive.
We also encourage clients to see sustainability reporting as more than compliance. With the ESRS now resembling the lighter Voluntary SME Standard (VSME), sustainability reporting is evolving into a more accessible, value-adding practice. This way, it can be integrated into everyday business rather than treated as a burden.
We’ll continue monitoring developments and will share updates as EFRAG finalizes the standards and the European Commission works on the Delegated Act. Don’t hesitate to contact us if you have any questions in the meantime.
