Simplified reporting standards: A new era for sustainability reporting under CSRD

The European Financial Reporting Advisory Group (EFRAG) has submitted its technical advice to the European Commission on the draft simplified European Sustainability Reporting Standards (ESRS) following extensive stakeholder consultations. This development is a major milestone in the EU’s sustainability journey, making compliance with the Corporate Sustainability Reporting Directive (CSRD) more achievable with the focus on substantial flexibility and reduction of data points whilst maintaining alignment with the European Green Deal.  

On 4 December 2025, the final draft ESRS were launched publicly along with the ESRS Knowledge Hub, which is a pivotal tool to help companies navigate the ESRS ecosystem.

What are the European Sustainability Reporting Standards (ESRS)?

The ESRS are a set of mandatory reporting requirements introduced under the CSRD. They define how companies must disclose information on environmental, social, and governance (ESG) topics to ensure transparency and comparability across the EU.

The ESRS framework covers:

• Environmental: climate change, pollution, water and marine resources, biodiversity, and resource use.
• Social: workforce, communities, consumers, and human rights.
• Governance: Business conduct, ethics, and compliance.

These standards aim to provide investors, regulators, and stakeholders with reliable sustainability data, enabling informed decision-making and supporting the EU’s transition to a sustainable economy.

How have the ESRS been simplified?

The simplified ESRS framework is designed to reduce the reporting burden while maintaining alignment with CSRD principles. These standards aim to:

• Streamline sustainability disclosures.
• Ensure consistency and comparability across EU sustainability reporting.
• Provide a proportionate approach without compromising transparency or quality.

By introducing simplified ESRS, the EU is enabling businesses of all sizes to contribute to the sustainability transition.

Key features of the simplified ESRS

The new simplified standards introduce several important changes to make sustainability reporting more practical and less compliance-heavy:

• Focus on relevance and clarity: Emphasis on useful information and fair presentation for more meaningful reporting.
• Simplified materiality process: Clearer guidance, reduced documentation, and better alignment with audit needs.
• Reduced data collection pressure: Removal of the preference for direct value chain data.
• Significant relief measures: Proportionality mechanisms and phased implementation for complex disclosures.
• Principles-based narrative standards: Flexibility in presenting policies, actions, and targets (PATs), with a focus on how sustainability issues are managed.
• Improved usability: ESRS are now shorter, clearer, and easier to interpret and apply.
• Streamlined datapoints: 61% fewer required datapoints (if material) and removal of all voluntary disclosures.
• Better global alignment: Enhanced interoperability with ISSB Standards, maintaining common disclosures where possible, improving fair presentation, revising GHG boundaries, and addressing anticipated financial impacts. Anticipated financial effects reporting will be mandatory by 2030, with early preparation advised.   Note: Some ESRS reliefs exceed ISSB provisions, so companies aiming for ISSB compliance should exercise caution.What next?
  The European Commission will now prepare the Delegated Act revising the first set of ESRS based on EFRAG’s technical advice. EFRAG will support implementation of ESRS through guidance, explanations resulting from Q&A and educational materials. 

Why is this important for your business?

Compliance with CSRD and ESRS is not just a regulatory requirement, it’s a strategic opportunity. The simplified ESRS:
•    Lowers complexity and cost for your sustainability reporting.
•    Helps you to build stakeholder trust through credible disclosures.
•    Supports your in preparing for future growth and full ESRS adoption.

Failing to act now could mean falling behind competitors who are already leveraging sustainability reporting for strategic advantage.

Ricardo's experts can help you to navigate CSRD and ESRS

At Ricardo, we provide end-to-end CSRD compliance support tailored to your business needs.

Our services include:

• ESRS gap analysis and readiness assessments.
• Double Materiality assessments aligned with ESRS requirements.
• Data collection and reporting frameworks for accurate disclosures.
• Training and capacity building for your teams.

Find out more about out CSRD support services

Simplified ESRS factsheet from EFRAG