ESRS is changing: What practitioners need to know

Arvis Zeile
4 days ago
3 min read

European sustainability reporting is being reshaped — not with more rules, but with sharper, more usable ones. In July 2025, EFRAG released exposure drafts for the amended ESRS as part of the EU’s Omnibus initiative to simplify reporting under CSRD. The aim: reduce burden, clarify expectations, and make reports more meaningful to users without weakening accountability.

Here are the changes that matter most for preparers.

1. Double Materiality becomes practical

One of the biggest pain points in ESRS v1 has been the complexity of the double materiality assessment. The amended standards make it kind of easier:

Companies are no longer expected to assess every possible impact across the full value chain.
They can choose either a top-down or bottom-up approach.
“Reasonable and supportable information” and “without undue cost or effort” become real guiding principles.
The concept of “gross vs net” is clarified to help assess impacts after mitigation or remediation.
☝🏼 A materiality filter now applies across most disclosures, including ESRS 2 — a significant shift from the current mandatory datapoints regardless of relevance.

In short, companies can focus on what’s truly material rather than reporting everything just in case.

2. Structure and complexity streamlined

EFRAG has substantially reorganised the standards to make them easier to apply:

Mandatory content has been moved to the main text.
Voluntary items have been stripped out or moved into a separate Non-Mandatory Illustrative Guidance.
Application Requirements have been reduced and placed directly under relevant disclosure requirements.
☝🏼 The confusing “minimum disclosure requirements” (MDRs) have been replaced by clearer “general disclosure requirements” (GDRs) in ESRS 2.

Disclosures on policies, actions, targets, and metrics can now be reported at either topic level or grouped across related IROs. If a company doesn’t have a target, it can simply state that fact—no invented content needed.

3. Targeted reporting reliefs

To cut unnecessary workload, several new reliefs have been introduced:

Acquisitions/disposals: New subsidiaries can be reported from the next period.
Value chain data: Estimates or proxy information are allowed where direct data isn’t available.
Undue cost or effort: Companies may omit or scope metrics when obtaining data would be unreasonable.
Non-significant activities: Minor contributions to metrics (e.g., water use in offices) may be excluded.

Existing transitional reliefs from ESRS v1 are maintained — and some have been extended.

4. Topical standards cleaned up

The biggest changes aren’t conceptual but practical:

ESRS E1 Climate: Organisational boundary is now aligned with the financial control approach. Additional operational data is only needed if required for “fair presentation.”

ESRS E2 Pollution: References to the European Pollutant Release and Transfer Register are removed. Reporting on pollutants will now rely on the Industrial Emissions Portal Regulation, environmental permits, and materiality. Microplastics get clearer treatment across three categories.

ESRS E3 Water:Topics on marine resources are dropped entirely.

ESRS S1 Own Workforce: Only material sub-topics need to be reported — not the whole standard. Country thresholds for “significant” employment are updated, wage requirements clarified, and “severe” incidents are replaced with “substantiated” ones.

ESRS G1 Business Conduct: Reorganised and simplified, with fewer datapoints.

5. What to do now

Even though the amendments won’t be adopted until late 2025 (☝🏼 for application in 2027, with early use possible from 2026), preparers should already:

Revisit double materiality with the new flexibility in mind.
Identify datapoints they’ll be able to drop or merge.
Align policy and target disclosures with the new "general
disclosure requirements" logic.
Consider where reliefs can reduce the workload.

CSRD & ESRS timeline — Original vs Omnibus (Stop‑the‑clock)

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Our ESG reporting platform is already fully aligned with ESRS v1, and we’re preparing to integrate the amended ESRS (v2) later this year. As the new standards reduce, merge, or relocate datapoints, the platform will help our identify exactly what can be removed, consolidated, or updated in their current reporting setup. Where disclosures shift from mandatory to materiality-based. We’re also exploring how AI can assist in mapping existing data to the revised requirements, automate gap analysis, and suggest which disclosures can be streamlined under the new materiality filter. In short, clients won’t need to start over — we’ll guide them through the changes and make the transition as efficient as possible.