Review of the ESRS: deadline set for October 31, 2025

Disclaimer: this is an automated translation from Italian. Go to the original article.

The review process of the ESRS was officially initiated by the European Commissioner Maria Luís Albuquerque with a letter addressed to key representatives of the EFRAG. The main goal is to reduce administrative burdens on companies, especially for SMEs, without compromising transparency and effectiveness of sustainability reporting. The deadline set by the EU Commission for the submission of the EFRAG's technical opinion is October 31, 2025. The aim is to simplify the regulatory framework which, while designed to promote greater corporate responsibility, has shown critical issues, especially for SMEs. The idea is to create a leaner reporting, focusing on what is truly relevant for sustainability without overburdening business resources.

For the revision of ESRS, the EFRAG will have to follow specific guidelines set by the European Commission. Among the main aspects, a significant reduction in the number of mandatory data points is expected, focusing on quantitative data and providing greater clarity between mandatory and optional data. The simplification also includes a reorganization of the structure and presentation of the standards to improve their consistency with other European regulations and make them more interoperable with global reporting frameworks. Another crucial point is the improvement of the materiality principle, which will have to be applied with greater clarity. The revision aims to simplify the application of the standards, reducing bureaucratic burdens without compromising the quality of the information transmitted, so that companies can face sustainability challenges with more effective tools.

The European Commission has set the deadline of October 31, 2025 for the submission of EFRAG's technical opinion. The amendments to the ESRS should be adopted in time to be applied by companies starting from the 2027 financial year, with a possibility of early implementation as early as 2026. Commissioner Albuquerque emphasized that the date could be subject to change based on the progress of ongoing legislative negotiations. By April 15, 2025, EFRAG must present a detailed work plan to ensure that the review process proceeds efficiently and promptly. The Commissioner also urged EFRAG to think innovatively, proposing practical solutions for the simplification of reporting, while maintaining the quality and reliability of the information.

The success of the review of the ESRS will also depend on the assessment of the costs and benefits of the proposed changes. The European Commission has reiterated that it is essential to carefully analyze the impacts of the changes on business burdens. The cost-benefit analysis will be a key element to ensure that the changes to the ESRS do not disadvantage companies while maintaining transparency and high-quality reporting. The ESRS review process will be closely monitored to ensure that the changes are truly beneficial for the business world and that they can promote the transition to a more sustainable economy.