European Commission Adopts Simplified Sustainability Reporting Standards

The European Commission has adopted revised European Sustainability Reporting Standards (ESRS), introducing significant simplifications to reduce reporting burdens for businesses while maintaining high-quality sustainability disclosures. The updated standards form part of the Commission's broader efforts to improve competitiveness and streamline corporate sustainability reporting across the European Union.

The revised ESRS reduce the number of mandatory reporting datapoints by more than 60% and the total number of datapoints by over 70%. The changes are designed to make sustainability reporting shorter, clearer and more proportionate, with reporting costs expected to decline by more than 30% per company while preserving transparency on environmental, social and governance (ESG) matters.

In addition to the revised standards, the Commission adopted a voluntary sustainability reporting standard for smaller companies that are not subject to the Corporate Sustainability Reporting Directive (CSRD). The framework is intended to provide a consistent approach for responding to sustainability information requests while limiting reporting demands placed on businesses within corporate supply chains.

The revised standards will now be submitted to the European Parliament and the Council of the European Union for scrutiny before entering into force. The initiative reflects the European Commission's commitment to simplifying sustainability reporting requirements while supporting reliable ESG disclosures and advancing the EU's long-term sustainable finance objectives.

Simplification is welcome but the substance of ESRS - double materiality, value-chain disclosure, transition-plan credibility - hasn't gone anywhere. Our ESG-strategy and sustainability-due-diligence teams help clients rebuild reporting infrastructure that survives further omnibus rounds without needing full redesign each time.