Understanding CSRD ESRS: What you need to know about the EU Sustainability Reporting Standards (ESRS)
As organisations grapple with growing expectations for transparency, consistency and accountability, the European Union has introduced a unified framework designed to reshape how companies communicate their environmental and social impact.
At the heart of this shift lie the EU Sustainability Reporting Standards (ESRS), a new, comprehensive set of rules that promise not only to raise the bar on disclosure quality but also to redefine what meaningful sustainability reporting looks like in practice.
More than a regulatory requirement, the ESRS represent Europe’s ambition to create a reporting landscape where information is comparable, credible and genuinely useful for decision‑making.
What are the EU Sustainability Reporting Standards
The EU Sustainability Reporting Standards (ESRS) are a set of mandatory reporting requirements designed to guide companies operating within the European Union on how to disclose sustainability‑related information. Their main purpose is to standardise the way organisations report on environmental, social and governance (ESG) matters, thereby enhancing transparency and comparability for investors, regulators and the wider public.
While the CSRD establishes who must report and when, the ESRS explain how that reporting must be carried out. Together, they create a comprehensive disclosure regime that enables companies to communicate:
- Their sustainability strategy and governance structures
- Key impacts, risks and opportunities (IROs)
- Performance and targets across ESG topics
The interdependence between CSRD and ESRS ensures that reporting is not only mandatory but also consistent, decision‑useful and aligned with the EU’s broader sustainability ambitions, including those under the European Green Deal.
Omnibus I and the upcoming ESRS review
In December 2025, EU institutions reached a provisional agreement on Omnibus I, part of a legislative effort to streamline sustainability reporting and reduce administrative burden for companies.
As part of this agreement, the European Commission must review the ESRS within six months of the Omnibus’s entry into force (expected Q2–Q3 2026). This review will draw on the draft revised ESRS submitted by EFRAG to the Commission on 3 December 2025, which form the basis of the forthcoming simplified reporting standards.
Moving towards simplification and flexibility
The latest draft of the EU ESRS has greatly simplified how companies report on sustainability matters. The number of required data points has been significantly cut to 71%. This marks a significant change, easing reporting obligations and giving companies more freedom in the way they report their environmental and social effects. As a result, businesses now have fewer mandatory details to share and can prioritise issues most relevant to their operations.
Key features of the revised standards include:
1. Introduction of the ‘fair presentation’ principle: The revised ESRS incorporate a principle commonly used in international frameworks such as ISSB and GRI. This allows companies to provide clear and accurate information about their sustainability, even when specific datapoints are not explicitly prescribed.
2. Double Materiality at the core: The revisions reinforce double materiality, the idea that companies must report:
- How sustainability issues affect their financial situation (financial materiality)
- How their activities impact people and the environment (impact materiality)
3. Reduction of topic‑specific requirements: The draft reduces details, making the requirements clearer and easier to use.
4. Greater flexibility in value chain reporting: The earlier version of the ESRS preferred primary data from companies across the value chain. The revised draft removes this preference, allowing companies to use estimates or secondary data when appropriate, provided they meet the standard of relevant and faithful representation.
5. Reliefs and phased application: Several mechanisms have been introduced to reduce reporting burden, including optional disclosures, improved guidance and phased‑in requirements
Together, those changes encourage companies to spend less time following a prescriptive list of datapoints and more on setting up a robust reporting system that works. The ultimate objective is that companies can focus only on what is material to them and avoid “ granularity and complexity”.
amfori encourages progress and remains committed to ongoing improvement
amfori supports EFRAG’s efforts to make the ESRS more practical and accessible while preserving strong alignment with international standards. We particularly welcome the strengthened focus on risk‑based approaches and double materiality, as these elements are vital for meaningfully linking sustainability reporting with due diligence.
Drawing on our extensive experience supporting businesses on their sustainability journeys, we recognise that the true value of reporting extends far beyond providing accurate information to financial stakeholders. Its real benefit lies in reinforcing companies’ due diligence and risk‑management processes, deepening their understanding of supply chains, promoting internal alignment, and ultimately enhancing resilience and long‑term competitiveness.
amfori appreciates the renewed emphasis on continuous improvement. This is reflected in the requirements to disclose year‑on‑year changes and in the expectation that companies demonstrate the robustness of the methodologies used for their double materiality assessments, target‑setting, metric calculations, and evaluations of strategy and business‑model resilience.
Finally, we welcome the maintained focus on value chain reporting, together with the increased flexibility for companies to begin with the approach that works best for them. Requiring companies to outline their plans for gradually improving the quality of their value chain information can help drive greater availability, reliability and accessibility of such data across markets.
While we recognise the need to accommodate varying company sizes, circumstances and maturity levels, progressively moving towards more accurate primary data remains essential. It is key to understanding impacts, risks and opportunities (IROs), identifying actions at the appropriate level, fostering collaboration across value chains, such as through joint capacity‑building or shared investments, and ultimately demonstrating real progress.
Next steps
To help companies benefit from ESRS reporting, amfori closely monitors policy developments and regularly updates its member-businesses and guides them throughout the process.
