ESRS Simplification Update
In response to growing concerns over disclosure burden, EFRAG has proposed key changes to the European Sustainability Reporting Standards (ESRS) under the CSRD. Blue Star Tech breaks down what this means for companies reporting in the EU.
Why the Update?
The first ESRS set, though well-intentioned, placed heavy demands on businesses, especially SMEs. Commissioner Albuquerque requested simplification. EFRAG responded with a new approach: maintaining transparency while reducing compliance complexity.
Five Areas of Simplification
1. Materiality Streamlining
Simplified double materiality assessments using a top-down, relevance-driven model.
2. More Readable Reports
Executive summaries and appendices encouraged—less clutter, more clarity.
3. Elimination of Duplication
Cross-cutting vs. topical disclosure overlaps are now resolved.
4. Clear Requirement Separation
Mandatory content is now distinct from optional or guidance-only disclosures.
5. Practical Reliefs
Exemptions offered where data collection is cost-prohibitive or commercially sensitive.
Impact on Companies
Businesses could see a 50% drop in mandatory data points. Reports will become more sector-relevant and flexible, easing compliance for both multinationals and SMEs.
Blue Star Tech's Take
We welcome EFRAG’s move toward actionable, simplified reporting. Blue Star Tech continues to support clients with ESG disclosure strategies that align with evolving EU and global standards.
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