In July 2025 EFRAG published amended exposure drafts ESRS suites. Described as a “Quick Fix,” these drafts are slimmer than the 2023 Delegated Act and align with the CSRD Omnibus reforms. They were released for a 60-day public consultation ending 29 September 2025 and aim to simplify double materiality, reduce datapoints and streamline structure. Beyond cutting text, they consolidate objectives, reduce mandatory datapoints and clarify the double-materiality assessment. This article highlights the main changes of ESRS 1 and 2 and sets out what these changes mean for the evolution of corporate reporting standards in Europe.
Consolidating objectives and aligning structures
A striking feature of the July 2025 drafts is consolidation. Previously, each standard stated four distinct objectives—covering impacts, actions, risks/opportunities and financial effects. The amendments integrate these into a single, unified objective statement that applies only when a topic is material, while still encompassing all four elements and allowing reporting at the level of individual impacts, groups of impacts or whole topics (Log of Amendments – ESRS S1 pp. 1–2; ESRS S2 pp. 1–2; Amended ESRS 2 paras 27–29). This shift appears in both ESRS 1 and ESRS 2 and is echoed in the social standards. Undertaking companies must now report on policies, actions, targets, dependencies, metrics and financial effects only when those elements relate to material impacts, risks or opportunities.
ESRS 1 and ESRS 2 now refer consistently to topics and sub‑topics (removing “sub-sub-topics”), and ESRS 2 lets companies decide whether to report at the level of individual impacts, grouped impacts or whole topics. The social standards adopt a shared list of six sub‑topics—ranging from working conditions to other labour‑related human rights—which helps link disclosures about employees and value‑chain workers (Log of Amendments – ESRS S1 pp. 3–4; ESRS S2 pp. 3–4).
Fewer mandatory datapoints and reliance on guidance
One reason the new drafts are shorter is that they delete or demote significant amounts of detailed data. Mandatory datapoints are concentrated in the body of each standard; “may” items were removed or converted into Application Requirements (AR), and a minority of removed datapoints were moved to Non-Mandatory Illustrative Guidance (NMIG). Cross-references that repeated topical datapoints in ESRS 2 have been trimmed (Log of Amendments – ESRS 2 pp. 43–44). ESRS 2 still requires narrative disclosures on preparation, governance, strategy and risk management, but it no longer repeats numerical datapoints that appear in topical standards.
The social standards follow the same pattern. ESRS S1 keeps headline indicators—such as the overall gender pay gap and the ratio of the highest‑paid person to the median employee—while granular breakdowns and methodology detail are handled via AR/NMIG rather than as separate mandatory datapoints (Log of Amendments – ESRS S1 pp. 38–44). Health and safety metrics emphasis accident counts and lost-time injury rate formulas. ESRS S2 is notably concise: it comprises three narrative disclosures (policies; engagement mechanisms and remedy channels; actions and resources) and one disclosure on targets for value-chain workers. There are no prescribed numerical supplier metrics in S2; any indicators beyond the narrative requirements are optional via guidance (Log of Amendments – ESRS S2 pp. 45–46).
Simplifying materiality and clarifying incident reporting
Lean documents do not necessarily mean looser standards. ESRS 1 clarifies and simplifies the double-materiality assessment to reduce checklist behaviour and focus on outcomes. Undertakings are required to report only on material impacts, risks and opportunities, and the revised text emphasizes that users should still understand both social and environmental effects and their financial consequences (Log of Amendments – ESRS S1 pp. 1–2). ESRS 2 asks companies to choose the level of aggregation that best reflects their management approach and to explain omissions at topic level where applicable.
A more substantive change concerns human-rights incident reporting. Instead of listing every complaint, S1 now applies a double filter: reportable incidents must involve internationally recognised human rights and be substantiated (e.g., through judicial or non-judicial mechanisms). Companies should explain how they collect the data and may note that higher counts can reflect more robust reporting systems (Log of Amendments – ESRS S1 pp. 108–109).
From metrics to process: implications
Another trend is a move from exhaustive metrics towards narrative and process information. ESRS 2 condenses general disclosures (preparation, governance, strategy and risk management) and relocates methodological detail to AR/NMIG; duplicated datapoints between ESRS 2 and topical standards were removed (Log of Amendments – ESRS 2 pp. 43–44). ESRS S2 focuses on how companies engage value-chain workers, the channels available to raise concerns and approaches to remedy, the actions and resources deployed, and—where set—targets and progress (Log of Amendments – ESRS S2 pp. 45–46). The pragmatic assumption is that where supplier data are scarce, a qualitative account of due-diligence processes may be more informative than long tables of numbers.
These shifts have mixed consequences. Simplified disclosures should ease compliance and let undertakings focus on what matters most, but they also place greater weight on management’s materiality judgements. Because many datapoints now reside in guidance, comparability may decline: some companies might report detailed supplier metrics while others offer only narrative descriptions.
On the upside, these amendments aim to strengthen interoperability, with tweaks such as aligning GHG boundaries to the financial consolidation model and introducing reliefs inspired by IFRS S1/S2. Joint guidance from EFRAG and the ISSB underscores that, particularly for climate-related disclosures, most ISSB requirements are embedded in ESRS, enabling dual compliance through a single report. However, EFRAG also acknowledges that additional burden-relief measures unique to ESRS—absent in ISSB standards—could introduce new divergences. ISSB Board members have raised similar concerns, warning that eliminating quantitative disclosures like anticipated financial effects may undermine comparability across the two frameworks. Overall, the July 2025 package simplifies the architecture and sharpens focus—but its successful reconciliation with global standards will depend heavily on stakeholder feedback during the consultation and careful roll-out.
