EFRAG Unveils Draft For Simplified EU Sustainability Reporting Standards

The European Financial Reporting Advisory Group (EFRAG) has released a draft of simplified sustainability reporting standards that could sharply reduce reporting requirements for companies under the EU’s Corporate Sustainability Reporting Directive (CSRD). The proposal aims to boost competitiveness and cut compliance costs while keeping Europe aligned with its Green Deal goals.

Under the draft, mandatory data points would fall by 61%, and all voluntary disclosures would be removed. Overall, the changes would reduce the required data by more than 70%. EFRAG also expects that once revised company-size thresholds come into force, nearly 90% of companies currently covered by CSRD may fall outside its scope. The new thresholds being considered apply to companies with at least 1,750 employees and €450 million in revenue.

EFRAG positions the overhaul as a “competitiveness play,” arguing that simpler rules will ease regulatory pressure on businesses without weakening Europe’s commitment to sustainable finance. The group said the revised framework continues to support the Green Deal’s core objective of advancing sustainability across the region.

The draft also proposes a more flexible approach to double materiality assessments. Companies would be allowed to use a top-down method, rely on narrower topic lists, and report only on material sub-topics. Annual full DMAs would no longer be required. The proposal further allows broader use of estimates rather than insisting on direct value-chain data—another change intended to reduce reporting complexity.

The draft will now move into the consultation and approval process before being finalised.