Significant simplification in sustainability reporting: the scope of data to be disclosed can be reduced by up to 57%

By: Trademagazin Date: 2025. 08. 08. 11:31

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According to the EFRAG draft, significant simplifications are coming to the ESRS standards, while companies will have more time to prepare thanks to the “Stop the Clock” measure in the Omnibus package.

European sustainability reporting is on the verge of major transformation: according to the progress report published by EFRAG (European Financial Reporting Advisory Group) in June 2025 and the ESRS draft released at the end of July, the number of datapoints to be disclosed by affected companies could decrease by up to 57%. This step aims not only to narrow the scope of required data but also to simplify and make the ESRS (European Sustainability Reporting Standards) more transparent, as well as to make corporate reports easier to handle.

The Omnibus package issued by the European Commission in February this year included the so-called “Stop the Clock!” proposal, under which the introduction of sustainability reporting obligations for companies entering in the second wave will be postponed to 2028 (for the 2027 financial year), allowing more thorough preparation for the standards.

Reporting on what matters

ESRS reporting came into effect in 2025 for several large companies, and based on the hundreds of reports published in the first cycle, information overload, content duplication and fragmentation became evident. EFRAG has therefore decided to simplify the double materiality assessment (DMA) by strengthening the “top-down” approach. This means that companies will report starting from their business model, focusing on the most important and relevant sustainability topics, thereby reducing excessive collection of less important data.

“The review will also focus on streamlining and integrating reports, such as separating voluntary and mandatory data, and presenting EU Taxonomy data in a separate appendix. By eliminating previous overlaps, a clearer system between minimum disclosure requirements and thematic standards will be established, making companies’ work easier.”
– emphasized Anita Sávoly-Hatta, Partner responsible for ESG reporting at PwC Hungary.

Further simplifications include clarifying the treatment of acquisitions and disposals, broader application of the “undue cost or effort” principle, and easing requirements regarding reporting boundaries and missing input data, all aimed at reducing the reporting burden.

Coherent and comparable data

EFRAG also aims for the ESRS standards to provide stronger interoperability with global reporting frameworks such as IFRS S1/S2 or the GHG Protocol standards. In addition to reducing the volume of datapoints, this will also help ensure more accurate interpretation of information and improve the comparability of corporate sustainability performance.

The current state of the ESRS review and the postponement provided by the Omnibus package are both important milestones in the evolution of sustainability reporting.

“While many interpret the changes as ‘watering down’ the CSRD, the experience of the first reports clearly shows that simplification and clarification are essential for reports to create real value and for companies to be able to convey truly relevant information to their stakeholders.”
– pointed out the expert.

The coming months will be critical at both regulatory and corporate levels, as feedback received during the public consultation period running until September 29, 2025, will significantly influence the final form of the ESRS and companies’ preparation paths for the new era of sustainability reporting.