Revised European Sustainability Reporting Standards (ESRS)

What you need to know about the 2025 draft revision and how to respond

7 August 2025

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What’s happened?

On the 31st of July 2025, the European Financial Reporting Advisory Group (EFRAG), the body appointed by the European Commission to prepare technical standards for reporting against the Corporate Sustainability Reporting Directive (CSRD), published a much anticipated draft of the revised European Sustainability Reporting Standards (ESRS). This follows the release of its Progress Report in June 2025. The consultation on the draft standards will be open until the 29th of September 2025.

The overarching aim is to simplify the standards, reduce complexity, and improve usability. In Anthesis’ view, the draft has made meaningful progress toward these goals.

What’s next?

The draft standards are now open for consultation, and EFRAG will organise outreach events throughout September and October to gather feedback from stakeholders.

Once the consultation closes on the 29th of September 2025, EFRAG will use the input to inform its technical advice to the European Commission, due by the 30th of November 2025. While the guidance may still evolve, the current draft offers a clear indication of EFRAG’s direction of travel.

How does this fit within the broader CSRD changes?

The ESRS revisions form part of the broader EU Omnibus Simplification Package, introduced in February 2025, which included a commitment to revise the standards.

While the ‘stop the clock’ amendment has delayed reporting deadlines for many companies, other regulatory components, including scope and disclosure requirements, remain under proposal. The EU Council’s latest proposal (21st of June 2025) supports EFRAG’s efforts to streamline the ESRS.

Find out more about the Omnibus Package here

Key features of the ESRS

The ESRS are a set of reporting standards used to meet the requirements of the CSRD. While the CSRD sets out reporting requirements and obligations, the ESRS provide the framework and methodology for reporting.

The ESRS are made up of two cross-cutting standards (ESRS 1 and ESRS 2) and 10 topic standards. The topical standards are divided into Environmental (ESRS E1-E5), Social (ESRS S1-S4), and Governance (G1) categories, and are only mandatory where they are material to the organisation. Materiality is determined through a Double Materiality Assessment, which supports stakeholders to understand both the organisation’s impacts on people and the environment, as well as the material financial impacts of sustainability matters on the organisation.

Key proposed changes

Based on stakeholder engagement, including over 800 survey responses, EFRAG has:

  • Reduced mandatory datapoints (to be reported if material) by 57%
  • Reduced the full set of mandatory and voluntary datapoints by 68%, from 1,100 to 350
  • Shortened the overall length of the standards by over 55%

The simplification of the ESRS and reduction in the number of datapoints does not eliminate the need for robust data management and governance, which will still be required to accurately manage and track ESG data over time.

  • Organisations will be able to include an executive summary
  • Detailed disclosures can be moved to appendices to enhance readability
  • Policies, actions and targets will be consolidated into one central section, removing repetitive information
  • Mandatory disclosures will be limited to material matters, with flexibility around non-material topics and clearer distinctions between mandatory and non-mandatory requirements
  • Greater alignment with other standards, with priority given to alignment with the International Financial Reporting Standards’ (IFRS) International Sustainability Standards Board (ISSB) S1 and S2 standards

Key updates to double materiality include:

  • The double materiality assessment remains pivotal to the ESRS and should start with an analysis of the business model to identify material topics
  • Companies can apply a top-down (starting with obviously material and not-material topics based on existing knowledge) or bottom-up (assessing all topics for relevance) approach for materiality, or a combination of the two
  • IROs (Impacts, Risks, and Opportunities) should be scored pre-mitigation, with residual risks noted
  • Additional practical considerations companies can take to reduce the complexity of the process added, for example, companies may not need to analyse each characteristic of severity
  • Materiality prioritisation guidance added for social topics with a new emphasis on focusing on key geographies, business units, or sub-topics when assessing social impacts
  • New flexibility to cross-reference to financial statements when reporting on monetary amounts or other quantitative information
  • New detail provided on how to disclose anticipated financial effects (though still required)

Key updates to the cross-cutting standards, include:

  • Streamlining of governance disclosures
  • Separation of SBM-3 (how sustainability matters, including how IROs influence the company’s strategy and business model) from IRO-2 (the processes for identifying and assessing these material IROs)
  • Clearer guidance on aggregating IROs at a higher level where appropriate and how to handle for location-specific environmental impacts
  • Descriptions of IROs may be presented alongside disclosures on related policies, targets, and actions
  • Clarification of the role of General Disclosure Requirements (formerly Minimum Disclosure Requirements), particularly in relation to policies, actions, targets, and metrics
Significant simplifications have been proposed across the topical standards, with a focus on removing duplication, reducing datapoints, and aggregating at the cross-cutting standards (ESRS 1, ESRS 2) level where possible.
Key changes include:
  • Datapoints relating to policies, actions and targets removed
  • Site-level reporting is no longer required for Environmental or Social KPIs
  • New reliefs introduced for:
    • Commercially sensitive data
    • Consolidation of reporting boundaries (e.g. for GHG inventory)
    • Allowance for the use of estimates or proxy data
    • Allowance to omit data from metrics if collecting such data would entail “undue cost or effort”
Environmental (E1-E5)
  • 60-80% reduction in datapoints
  • Datapoints and guidance on the identification of local impacts related to pollution, water resources and biodiversity, and ecosystems removed. These impacts are typically linked to specific sites
  • ESRS E1 – climate change:
    • Increased focus on absolute GHG reduction targets, consistency with inventory boundaries, and how targets align with limiting global warming to 1.5°C
    • Transition plan disclosures are now more focused, with clearer guidance and a consolidated format highlighting only the key features of the plan
    • Disclosures must still indicate when no plan exists, and a new datapoint on dependencies (including locked-in emissions) has been added to align with IFRS S2
    • Scenario analysis is not mandatory for all undertakings but, if used, must follow clarified methodological expectations
    • Key elements of climate risk identification and assessment are now consolidated into a single datapoint for greater clarity
  • ESRS E2 – pollution: More focus and guidance on microplastics disclosure requirements
  • ESRS E3 – water and marine resources: Disclosures on marine resources removed
  • ESRS E4 – biodiversity and ecosystems:
    • 78% shorter with a focus on one transition plan disclosure
    • Biodiversity offsets must be disclosed but only at a high-level
  • ESRS E5 – resource use and circular economy:
    • Narrowed disclosure to key products regarding durability, reparability, and rate of recycled content
    • A metric on the “percentage of critical/strategic raw materials” added
    • Only material hazardous waste flows need to be fully disclosed
    • A new mandatory metric (subject to materiality) added on the percentage or weight of waste generated for which the final treatment or destination is unknown
Social (S1-S4)
  • A 53-64% reduction in datapoints
  • 8 datapoints from the 4 standards have been merged into a single “human rights policy” disclosure under ESRS 2 General Disclosures, aligning with IFRS S1/S2
  • Most optional (may disclose) options have been removed; only core narrative or quantitative disclosures remain where they are strictly required
  • ESRS S1 – own workforce: Metrics tables for diversity, health & safety, grievance, labour engagement, and community indicators condensed or merged for clarity
  • ESRS S4 – consumers and end users:
    • Focus narrowed to essential consumer/safety topics
    • Marketing and product-related datapoints are now largely optional or removed
    • Sensitive data can be summarised
Governance (G1)
  • A 50% reduction in datapoints
  • The alignment of the structures of the Policies, Actions and Targets section in G1 with the rest of the ESRS

EFRAG has published several helpful documents alongside the public consultation survey, including detailed logs of amendments for each standard. These are useful for understanding the proposed changes quickly.

What should you do now? 

While this draft is subject to change, the direction of travel is set, and ESRS simplification will happen.

For organisations entering Year 2 of CSRD reporting
While there may be limited opportunity to respond to the proposed simplification in your next report, you can align with its intent. Focus on developing strategies to manage your IROs and that you are reporting on how they align with the actions you’re taking, the metrics and KPIs you’re using, and your performance.

For companies with a two-year delay
There is time to prepare, but plenty to do ahead of the deadline. If you haven’t already, start your double materiality assessment now, using the draft revised ESRS as a guide. Doing so gives you time to collect data, close gaps, and shape an integrated sustainability strategy ahead of the FY2027 deadline.

Organisations that have already finalised their Double Materiality Assessment 
Begin preparing for a gap analysis focused on at least three core ESRS: E1 (Climate), S1 (Own Workforce), and G1 (Business Conduct). Analysis of existing reports from Wave 1 companies shows that all reported on these three standards, making them a logical and low-risk starting point. By concentrating on the mandatory quantitative disclosures within these ESRS, companies can gain time, maintain momentum, and avoid over-engineering early-stage reporting efforts. You may also choose to extend this approach to other clearly material topics, applying the same focused methodology.

Although the reporting deadline has been pushed back, using this time to make continuous improvements will enable more mature and robust disclosures by 2028. With a realistic roadmap and clear alignment from top management, you’ll be in a stronger position to secure the necessary budget and cross-functional time commitments, especially as ESG managers cannot deliver this alone.

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How Anthesis can help

At Anthesis, we help clients go beyond compliance to unlock the full value of sustainability reporting.

Our approach ensures your CSRD disclosures:

  • Reflect your unique risks and opportunities
  • Are decisions useful for internal and external stakeholders
  • Support governance, performance, and long-term impact

With 1,400+ sustainability experts across climate, human rights, supply chain, finance, and beyond, we bring deep technical know how, regulatory insight, and a proven ability to implement change.

Whether you’re starting your CSRD journey or preparing your second report, we can help you bridge the gap between materiality and action.

Book a call here

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