EFRAG Plans 50% Cut In EU Sustainability Reporting

EFRAG to Halve Reporting Burden in Overhaul of EU Sustainability Standards

The European Financial Reporting Advisory Group (EFRAG) has released a draft status report outlining significant revisions to the European Sustainability Reporting Standards (ESRS), aiming to cut the number of required datapoints by over 50%. The move comes as part of broader efforts by the European Union to streamline sustainability reporting and ease the compliance burden on businesses subject to the Corporate Sustainability Reporting Directive (CSRD).

EFRAG’s initiative forms a key component of the European Commission’s broader regulatory reform strategy, particularly the Omnibus I package introduced in February 2025. The package proposes sweeping changes across several critical regulatory frameworks, including the CSRD, the Corporate Sustainability Due Diligence Directive (CSDDD), the Taxonomy Regulation, and the Carbon Border Adjustment Mechanism (CBAM). These revisions are designed to reduce the administrative and financial strain on businesses while still upholding the EU’s ambitious sustainability and climate-related goals.

Initially tasked by the European Commission in June 2020, EFRAG was responsible for preparing the first draft of the ESRS, which were adopted in 2023. With the Commission now aiming to simplify the ESRS, EFRAG has been directed to provide technical advice on revising the standards. The tight timeline outlined in the Commission’s mandate requires EFRAG to submit its recommendations by October 31, 2025, giving the group just seven months to finalize its proposal.

Despite the ambitious reduction target, EFRAG emphasized in its status report that the integrity of the CSRD’s core objectives will remain intact. The group asserts that by focusing on core, high-impact disclosures, companies can still provide valuable and reliable sustainability information without being overwhelmed by unnecessary complexity or overly detailed narrative disclosures.

EFRAG’s findings are based on input collected from a variety of stakeholders, including corporate preparers who have begun implementing the ESRS, as well as investors and analysts who rely on these disclosures for informed decision-making. A consistent concern raised by respondents is that the current ESRS are overly granular—particularly in narrative datapoints around policies, actions, and targets—which often leads to reporting fatigue and inefficiencies in communicating key information.

In response to this feedback, EFRAG is proposing to adopt a “less granular approach” to narrative disclosures, eliminating datapoints deemed irrelevant or redundant. In many cases, information that is not critical to achieving the standards’ disclosure objectives may be moved to non-binding guidance documents, rather than required disclosures. This change, EFRAG argues, would not compromise data quality but would allow companies to focus on delivering more concise and meaningful reports.

The simplification effort will center on several strategic levers. Among the most significant is the streamlining of the double materiality assessment (DMA) process. This assessment, which requires companies to evaluate sustainability issues from both a financial and impact perspective, has been widely criticized as overly complex and burdensome. EFRAG plans to refine and clarify DMA requirements to ensure they remain robust but more manageable for companies of all sizes.

Improving the overall readability and conciseness of sustainability statements is another core focus area. By reducing the sheer volume of required disclosures and clarifying language within the standards, EFRAG aims to make sustainability reports more accessible to both preparers and readers. This includes improving the inclusion of corporate reporting into mainstream financial and strategic disclosures and enhancing the interoperability of the ESRS with other global frameworks—particularly the IFRS Sustainability Disclosure Standards issued by the International Sustainability Standards Board (ISSB).

EFRAG also acknowledged the challenge of adhering to the current timeline. While the group intends to approve the Exposure Drafts for its technical advice in July, with plans to publish them for public consultation in August and September, it has expressed openness to extending the consultation period. The report notes that such an extension could improve the overall quality and robustness of the final standards. EFRAG has signaled that any modification to the October deadline would require the Commission’s approval, but it sees value in allowing more time for comprehensive stakeholder engagement and technical refinement.

Ultimately, EFRAG’s revision of the ESRS is part of a broader evolution in sustainability reporting, as European regulators seek to balance the need for transparency with the practical realities faced by businesses. The anticipated reduction of datapoints is not merely a numbers exercise—it reflects a more thoughtful, evidence-based approach to ensuring that sustainability reporting remains relevant, effective, and aligned with broader EU policy goals.

With companies preparing for a transformed regulatory landscape, the forthcoming changes to the ESRS will likely have widespread implications across industries. If the proposed revisions are successfully implemented, businesses may find it easier to navigate the complexities of sustainability reporting, while investors and other stakeholders could benefit from clearer, more focused disclosures.

As the process unfolds, all eyes will be on EFRAG’s upcoming Exposure Drafts and the feedback they receive during the public consultation period. Whether or not the October deadline holds, the initiative marks a decisive moment in the EU’s journey toward smarter, more streamlined sustainability regulation.