EU Moves to Simplify Sustainability Reporting

The EU Commission's Omnibus package, just introduced in February, proposes significant reductions in sustainability reporting and regulatory burdens on companies, part of the Commission's broader effort to alleviate administrative burdens on companies while maintaining the objectives of the European Green Deal. The package includes revisions to several regulations, such as the CSRD, the Corporate Sustainability Due Diligence Directive (CSDDD), the Taxonomy Regulation, and the Carbon Border Adjustment Mechanism (CBAM).

As part of this effort more recently, the European Commission directed the European Financial Reporting Advisory Group (EFRAG) to expedite the development of simplified standards for sustainability reporting under the Corporate Sustainability Reporting Directive (CSRD). 

 More specifically, EFRAG has been tasked to "substantially reduce the number of mandatory ESRS data points," focusing on eliminating less critical data points and emphasizing quantitative over qualitative disclosures. Additionally, existing provisions within the ESRS will be clarified to enhance consistency with other EU legislation and provide clearer guidance on applying the materiality principle all while ensuring that interoperability with global standards will not be compromised.  

EFRAG has been given a deadline of October 31, 2025, to submit its technical advice, with an internal timeline and work plan expected by April 15.