EFRAG Issues Technical Advice on Simplified ESRS: Key Takeaways for CSRD Reporting

The European Financial Reporting Advisory Group (EFRAG) on December 3, 2025 submitted its long-anticipated technical advice to the European Commission on a proposed set of simplified European Sustainability Reporting Standards (ESRS). This development marks a major step in the Commission’s broader Omnibus initiative to ease administrative burden under the Corporate Sustainability Reporting Directive (CSRD). The simplified standards would significantly reshape how in-scope companies approach ESG reporting in the coming years. The proposal comes after the three European co-legislators, the European Commission, Parliament, and Council, have each set forth their negotiating mandate for the now-ongoing trilogue discussions on the future of CSRD.

Key Developments

EFRAG’s proposal introduces a substantially leaner reporting framework.

• The number of mandatory (when material) data points is reduced by about 61%, with all former voluntary disclosures removed.
• In addition, the draft standards restructure and condense narrative requirements, streamline definitions, and eliminate duplicative items, resulting in shorter, more accessible reporting obligations.
• A notable change is the increased emphasis on proportionality. Companies would be permitted, in certain circumstances, to rely on estimates instead of direct value-chain data, reflecting a more pragmatic approach to data availability.
• The materiality assessment has also been redesigned to be more intuitive, with the goal of enabling companies to concentrate on genuinely decision-useful information rather than extensive documentation exercises.
• EFRAG seeks to enhance interoperability with the ISSB Standards. Common disclosures are said to have been preserved where possible, and improvements are incorporated through the adoption of fair-presentation principles, a revised greenhouse gas (GHG) emissions boundary, and new provisions addressing anticipated financial effects.

Why This Matters

If adopted, the simplified ESRS could significantly reduce compliance burdens, particularly for companies with limited internal ESG infrastructure or complex supply chains. The clearer structure and reduced datapoints may make the reporting process more manageable and accelerate readiness among first-time CSRD reporters.

However, simplification does not eliminate the need for strong internal processes. Companies will still be required to perform a robust double-materiality assessment to ensure their disclosures are supported by reliable data and internal controls. While enhanced ISSB interoperability strengthens alignment, some ESRS relief extends beyond what is available under the ISSB Standards. Companies intending to assert compliance with both frameworks will need to exercise caution and ensure that reliance on ESRS-specific relief does not jeopardize ISSB conformity. Preparers should also anticipate continued expectations from investors, auditors, and regulators regarding the quality and completeness of sustainability information, regardless of the reduced volume of mandatory disclosures.

Next Steps

The European Commission will now consider EFRAG’s technical advice as it prepares a Delegated Act to revise the ESRS. The final text, once adopted, will define the disclosure obligations for companies reporting under CSRD. EFRAG has signaled that it will issue further implementation support, including guidance and tools through its ESRS knowledge hub, to assist companies during the transition.

Adopting EFRAG's advice would be in line with the European Commission’s recent proposal to reduce administrative burden on financial market participants by simplifying ESG transparency obligations for financial products under the Sustainable Finance Disclosure Regulation (SFDR).

Recommended Actions for Companies

Companies should begin by obtaining a broad overview of how the simplified framework would align with their current ESG reporting processes. This includes identifying where reduced datapoints may ease operational burden and where internal systems may still require strengthening. It will also be important to revisit materiality assessments under the streamlined standards and determine how changes may affect governance, data collection, and assurance strategies.

Early engagement of internal stakeholders—such as sustainability teams, finance, legal, compliance, and audit—will help ensure a coordinated transition. Companies that start planning now will be better positioned to take advantage of the reduced reporting burden while maintaining high-quality and credible sustainability disclosures.