Overview of the proposed amendments to the ESRS

Key takeaways from the changes to ESRS

On 3 December 2025, EFRAG submitted technical advice to the European Commission on the simplified European Sustainability Reporting Standards (draft ESRS), following the Commission’s 26 February 2025 Omnibus package intended to simplify EU reporting rules related to the European Green Deal.

EFRAG notes a 61% reduction in mandatory datapoints compared to the currently applicable ESRS¹. The delegated act is expected mid‑2026, with intended application from financial year 2027². Whether early application for financial year 2026 will be permitted remains to be determined. 

What are the key changes in the draft ESRS?

The draft ESRS introduce significant changes to both content and structure compared with the currently applicable ESRS.

Changes to the structure of the draft ESRS

To improve understandability, clarity and accessibility, the draft ESRS adjust how the standards are organised. The overall architecture is unchanged: two cross‑cutting standards and ten topical standards.

• Mandatory disclosure requirements are moved to the main body of each standard.

• Voluntary disclosures are deleted or redrafted as application requirements (ARs).

• Application requirements are relocated to follow their related disclosure requirements (DRs).

• Minimum disclosure requirements (MDRs) are renamed general disclosure requirements (GDRs). Topical standards cross‑refer to these for policies, actions and targets.

For the structure of an undertaking’s sustainability statement, draft ESRS 1 introduces new options, including permitting the use of:

• An executive summary covering key messages about an undertaking’s material impacts, risks or opportunities;

• A specific appendix for EU Taxonomy‑related information; and

• Appendices for more granular information, tables of contents, supplementary information, or mapping and cross‑referencing tables.

Simplified Double Materiality Assessment (DMA)

The European Commission asked EFRAG to prioritise the application of materiality in sustainability reporting. In response, draft ESRS 1 adds guidance on the double materiality assessment, including:

• Not every impact, risk and opportunity (IRO) across the undertaking’s operations and value chain requires a full, detailed assessment.

• Relief to use “reasonable and supportable information without undue cost or effort”.

• Flexibility to perform the DMA either top‑down at topic level or bottom‑up from individual IROs.

• Updated guidance on mitigation, remediation and prevention actions in relation to actual or potential impacts (gross versus net).

• Requirement to consider that information about impacts and how they are managed may be decision‑useful to users, irrespective of how effectively they are managed or regulated.

• Guidance on what can and cannot be considered a positive impact.

A streamlined list of sustainability topics in draft ESRS 1 Appendix A, including the removal of sub‑sub-topics.

New permanent reporting reliefs

Draft ESRS 1 introduces new permanent reporting reliefs to reduce the reporting burden for preparers.

•  Acquisitions and disposals. An undertaking may defer the inclusion of a newly acquired subsidiary or business from its DMA and sustainability statement until the next reporting period. A disposed subsidiary or business may be excluded from the beginning of the period in which the disposal occurs. Any significant events that give rise to material IROs during the relief period must still be disclosed.

• Undue cost or effort. The standards introduce the use of “all reasonable and supportable information that is available to the undertaking at the reporting date without undue cost or effort”. This applies to identifying material IROs and determining the scope of the value chain. It also applies when preparing metric information and reporting current and anticipated future financial effects.

• Calculating metrics. An undertaking may omit information relating to specific activities if those activities are not key drivers of the related IRO. It may also report only an objectively defined part of the reporting boundary for a particular metric where reliable data is not obtainable without undue cost or effort.

If an undertaking avails itself of any of these reliefs, certain disclosures are required. 

What’s next?

The Commission will prepare a Delegated Act revising the existing ESRS, based on EFRAG’s technical advice. As part of this process, it will consult relevant EU bodies and member states, and launch a one‑month call for feedback.

After the call for feedback, the Commission will adopt the Delegated Act. The Council and the European Parliament will then scrutinise it for four months, with a possible two‑month extension.

If neither institution objects, the revised ESRS will be adopted and enter into force.

Key actions businesses can take today

We’re here to help

We bring trusted ESRS expertise across reporting, controls and assurance. Our teams combine technical depth with sector insight to help you interpret the draft ESRS, streamline your DMA, and get assurance‑ready. We convene finance, sustainability, risk and technology stakeholders — inside your organisation and across our network — to align decisions and accelerate delivery.

We provide clear, candid views on what matters now. We integrate data, process and tooling to unlock reliable metrics and efficient reporting. For more detail, see our ‘In depth’ on PwC Viewpoint. And if you’re interested in discussing the Omnibus simplification package’s impact on your business, get in touch today.