EFRAG Cuts ESRS Data Points by Over 70% in Simplified Revision

The European Financial Reporting Advisory Group (EFRAG) has released a finalized proposed revision of the European Sustainability Reporting Standards (ESRS) that reduces mandatory data points by 61% and eliminates all voluntary disclosures, resulting in a total reduction of over 70%. The simplified standards form part of the EU Commission's Omnibus I initiative to reduce regulatory burden on companies under the Corporate Sustainability Reporting Directive.

EFRAG's revised ESRS goes beyond the 68% data point reduction proposed in its July draft, now cutting mandatory disclosures by 61% and removing all voluntary datapoints. The standards also introduce significant simplifications to the double materiality assessment (DMA), which EFRAG described as the most challenging area, including an option for companies to apply a top-down approach and a clarification that a full DMA is not required annually unless significant changes occur. The finalized new scope is expected to apply only to companies with at least 1,750 employees and €450 million in revenues, removing roughly 90% of companies compared to the pre-Omnibus CSRD regulation.

For Indian companies with subsidiaries or significant revenues in the EU, the revised ESRS narrows the set of entities likely to face mandatory reporting obligations while also reducing the depth of supply chain data requests they can receive from EU counterparts. The elimination of the standard's preference for direct value chain data and the introduction of a 'reasonable and supportable information without undue cost or effort' proportionality mechanism are particularly relevant for Indian SMEs that supply European multinationals. The revised ESRS also increases interoperability with IFRS Foundation ISSB standards, strengthening alignment with the direction of India's own BRSR Core and any future mandatory sustainability disclosure framework.

Following EFRAG's release, the European Commission must prepare a Delegated Act to officially revise the initial ESRS before the simplified standards enter into force. The changes introduce phasing of challenging disclosures over time and additional flexibility in supply chain reporting. EFRAG Board Chair Patrick de Cambourg said the simplification reflects a balance between competitiveness and the EU's Green Deal commitments. The timeline for the Delegated Act will determine when companies can formally rely on the revised standard for their next reporting cycles.

Key figure — Over 70% reduction in data points