The European Sustainability Reporting Standards (ESRS) are undergoing critical revisions aimed at simplifying compliance and enhancing the quality of sustainability disclosures. Spearheaded by the European Financial Reporting Advisory Group (EFRAG), these updates align with the European Green Deal’s objectives while addressing the needs of businesses and stakeholders. Below, we outline the key updates, the revision process, and what this means for organizations adapting to these changes.

Goals of the ESRS Revisions

The revisions seek to strike a balance between reducing the administrative load of reporting and ensuring sustainability data remains relevant and actionable. Changes are focused on three key pillars of the EU’s Omnibus Package including the Corporate Sustainability Reporting Disclosure (CSRD), the EU Taxonomy Regulation (EU Tax-VO), and the Corporate Sustainability Due Diligence Directive (CSDDD).

The primary objectives include:

• Simplifying Reporting Requirements: By cutting back on non-essential disclosures, the revisions aim to reduce the strain on businesses (particularly SMBs), enabling less intensive compliance processes.
• Elevating Quantitative Data: Prioritizing data-based disclosures ensures businesses deliver measurable, decision-useful information rather than overly narrative explanations.
• Clarifying Materiality: The updated guidance will provide businesses with clearer instructions on reporting what truly matters, helping prevent over reporting or excessive detail.
• Enhancing Compatibility with Global Standards: The revisions promote better alignment with international frameworks (such as ISSB and GRI), making it easier for businesses operating globally to adopt consistent practices.
• Improving Usability: By restructuring the ESRS framework, the updates aim to make disclosures easier to understand and apply, benefiting both preparers and stakeholders.

These changes are designed to help businesses focus on impactful sustainability efforts while empowering stakeholders with accurate and actionable data.

The Revision Timeline and Process

EFRAG recently laid out a detailed plan to meet the European Commission’s (EC) goal of delivering the revised standards by October 2025 with several key milestones:

1. Vision and Strategy Development (April–May 2025):
   EFRAG will identify actionable ways to simplify the ESRS structure, focusing on materiality definitions and removing outdated or burdensome data points. This step emphasizes learning from companies already implementing current standards.
2. Evidence Gathering and Stakeholder Input (April–June 2025):
   By engaging with businesses, auditors, investors, and civil society groups, EFRAG will collect valuable feedback to inform updates. Public consultations, surveys, and workshops will serve as the primary methods for collecting insights.
3. Drafting Revisions (May–July 2025):
   Using input gathered, EFRAG will prepare exposure drafts (EDs) suggesting changes aimed at reducing complexity and improving materiality assessments. These revisions will also focus on streamlining compliance and minimizing unnecessary administrative demands.
4. Public Consultation (July–September 2025):
   Exposure drafts will be shared for a condensed 30–45 day review period, during which businesses and stakeholders can provide additional feedback. Hybrid outreach events will ensure broad participation in this critical stage.
5. Finalizing and Submission (October 2025):
   Incorporating feedback, EFRAG will finalize the updated ESRS and present them to the European Commission, along with supporting documents and impact assessments. The finalized standards will aim to reduce reporting burdens substantially while retaining their decision-useful nature.

Steps Businesses Should Take Now

Businesses should start preparing for the changes now - evaluating their current processes and establishing a proactive approach. Key steps include:

• Identifying reporting gaps and ensuring alignment with anticipated revisions to materiality principles.
• Simplifying data collection workflows and creating data pipelines to support the prioritization of quantitative insights.
• Engaging with stakeholders to incorporate their evolving expectations into sustainability strategies.
• Ensuring compliance frameworks are adaptable and data gathering architecture is flexible to changes in global interoperability requirements.

Final Thoughts

The ESRS revisions mark an important evolution in sustainability reporting. By staying on top of developments and preparing early for the 2025 updates, businesses can transform compliance obligations into a competitive edge. If you are seeking guidance and tools to assist with these revisions, let’s connect.