As Europe looks to simplify and streamline sustainability reporting standards, Bayard Rezos, senior sustainability consultant at Emperor, looks at how the revised ESRS could reshape next year’s sustainability statements.

Like running a marathon where the course keeps shifting, companies are facing another reporting cycle as the updated European Sustainability Reporting Standards (ESRS) are still being finalised. The Corporate Sustainability Reporting Directive was always ambitious. When the ESRS landed in 2023, they set a new precedent for sustainability disclosure frameworks. But with ambition comes complexity and confusion, particularly for companies publishing their first Sustainability Statements earlier this year.

There was plenty of pushback. With concerns about proportionality, the European Commission introduced the Omnibus proposals in early 2025, which included ambition to streamline and simplify reporting requirements whilst preserving credibility and comparability. As the public consultation comes to a close and companies prepare for round two, it’s a good moment to take stock and assess what impact the moving goalposts could have on next year’s reporting cycle.

So, what’s changed?

Less is more

1,200 datapoints is a lot of information. This covered both mandatory and voluntary disclosures spread across general and topical standards. This was an overwhelming number for most companies and difficult to operationalise. The revised standards have reduced the mandatory data points by more than half and completely removed voluntary data points. In total, around 68% of the disclosures have been cut.

Materiality that lives up to its name

Double materiality has been streamlined. Companies can now take a ‘top-down’ approach to more easily zero in on what really matters, using a reasonable, evidence-based approach to identify and assess the materiality of impacts, risks and opportunities.

User-friendly disclosures

Where before detailed application requirements were tucked away in the annex of each standard, they are now directly under the related disclosure requirements. Non-mandatory illustrative material has also been split out into a new Non-Mandatory Illustrative Guidance document. This simple edit is one example of how the ESRS has been made clearer for companies to understand what is mandatory versus advisory.

Cutting the overlap

The ESRS has had a shake-up to remove redundant and overlapping language between the general disclosures and topical standards. For instance, companies can now disclose policies, actions and targets once - and then cross-reference across topics.

Further relief

We’ve got more flexibility and additional reporting reliefs, including the phase-in of certain metrics, comparatives and value-chain information. Explicit ‘undue cost or effort’ clauses give companies more room to manoeuvre. However, companies need to weigh the costs of gathering the information against the benefits for readers.

How could these changes impact future reporting?

With these reforms in place, the upcoming round of Sustainability Statements is likely to look very different from the first wave. We expect to see:

Sharper focus

The simplification of disclosures and the materiality assessment process mean companies are likely to adopt an approach that homes in on material impacts, risks and opportunities that are critical for the business to manage. This should lead to shorter, more strategic statements that communicate sustainability priorities more clearly to stakeholders.

Greater comparability

The quality of first round Sustainability Statements was inevitably uneven, due to preparations, investment and comprehension varying significantly between companies. The revised ESRS includes streamlined disclosure requirements, clarified overlaps and greater alignment with other sustainability frameworks, including the International Financial Reporting Standards. For next year, we should see greater consistency and comparability across peers and frameworks.

Raised expectations

The shift from complexity to clarity is certainly welcome. But while simplification helps companies, it also raises expectations among report users. Investors, NGOs and regulators may scrutinise second-round statements more closely now that large companies have had experience and there are comparisons to benchmark against. Any omissions will be harder to justify, and stakeholders will look for evidence that companies are moving beyond compliance towards genuine progress.

What next?

The transformation of the ESRS under the Omnibus proposals marks a shift from complexity to clarity. The first round of Sustainability Statements was demanding for many companies, but the streamlined standards should make 2026 reports more focused, usable and aligned with global expectations. Still, simplification is not a free pass for companies. The expectation will certainly be for higher quality and meaningful progress, not just less volume.