Simplified ESRS reporting standards Published

 

The most significant changes for companies are outlined below

Materiality Analysis

Double Materiality Analysis (DMA) remains the central methodology for identifying sustainability topics to be reported in the sustainability statement, including under the simplified standard. However, ESRS 2.0 introduces a more pragmatic and streamlined approach, allowing companies to apply a top-down assessment focused on sub-topics that are most likely to be material based on their sector. Companies may also assess risks on a net rather than gross basis by considering the impact of measures implemented in previous years when evaluating actual and potential negative impacts.

 

Application of ESRS 2.0

Companies in Wave 1 and Wave 2 of the CSRD must adopt ESRS 2.0 from FY2027. For FY2026, Wave 1 companies and Wave 2 companies reporting voluntarily under the CSRD may choose to continue using ESRS Set 1 or adopt ESRS 2.0 early. Companies reporting under ESRS Set 1 in FY2026 can still benefit from reliefs such as undue cost and effort, omission of joint operations, exclusion of activities that are not significant drivers from metrics, and a top-down approach to the DMA.

(For more information on the CSRD Scope post Omnibus 1 simplification package please click here )

 

Fair Presentation and Materiality of Information

Under the fair presentation principle, companies must transparently disclose material information and may introduce entity-specific datapoints where ESRS datapoints do not adequately depict the company's situation in relation to the sustainability topic. The materiality of information filter applies to all ESRS disclosures, including general disclosures, enabling companies to omit datapoints that they deem are not material to their stakeholders. This shifts the ESRS from a compliance-driven checklist approach to a principle-based fair presentation approach.

 

Phase-In Reliefs

A key change in the simplified ESRS 2.0, published through the delegated act, concerns the disclosure of anticipated financial effects. Wave 1 companies may omit all anticipated financial effects disclosures until FY2028 and quantitative disclosures until FY2030. Wave 2 companies may omit all anticipated financial effects disclosures during their first two reporting years and quantitative disclosures during their first four reporting years.

 

Reporting Reliefs for Companies

The primary objective of the revised standards is to reduce the reporting burden on companies. This is achieved through a 60% reduction in mandatory datapoints and a 70% reduction in total datapoints. Companies can also apply reliefs such as undue cost and effort, exclusion of acquisitions, disposals, subsidiaries, and joint operations from the sustainability statement, omission of activities that are not significant drivers of sustainability information, and the use of partial estimates where data is unavailable or of poor quality, such as value chain data.

 

What Does the Current CSRD Reporting Landscape Look Like?

While ESRS 2.0 simplifies reporting, it is useful to understand how companies currently perform under CSRD reporting requirements. To assess this, EFRAG analysed 900 audited sustainability reports across the EU.

Key findings include:

• E1 Climate Change (99%), S1 Own Workforce (99%), and G1 Business Conduct/Governance (95%) remain the most frequently reported topical standards among companies.
• 82% of companies updated their Double Materiality Assessment (DMA) process in 2025 compared to their 2024 reporting cycle, while 67% adopted a hybrid approach combining top-down and bottom-up assessments, including peer benchmarking, to identify material topics.
• Companies reported an average of 6.4 material topics; however, across the analysed reports, only 3.3 measurable sustainability targets were disclosed on average.
• The disclosure of climate transition plans increased significantly, with 69% of companies reporting a transition plan compared to 55% in 2024. However, only 57% stated that their short- and long-term decarbonisation targets are aligned with a 1.5°C pathway.
• 63% of reporting companies have incorporated sustainability-related targets into executive remuneration frameworks.
• 81% of companies reported using ESG criteria in supplier selection processes within their FY2025 sustainability statements.

These findings indicate that sustainability reporting is gradually maturing. Companies are refining DMA processes, strengthening climate transition planning, integrating sustainability into executive incentives, and embedding ESG considerations into procurement decisions.

 

Practical Steps for Companies

• Map the Exemptions and Reporting Reliefs
  Identify new ESRS 2.0 reliefs and phase-ins and determine which Set 1 datapoints are no longer required to avoid unnecessary reporting effort.
• Revisit the DMA Strategically
  Focus on sustainability topics that create business value. Where a DMA has recently been completed, update existing impacts, risks, and opportunities (IROs) using the revised gross/net materiality guidance rather than restarting the process unless significant changes have occurred.
• Focus on Decision-Useful Information
  Review IROs and disclosures to ensure they remain relevant to stakeholders. Align material topics with the business model, value chain, and peer practices to strengthen strategic relevance.
• Limit Entity-Specific Disclosures
  Introduce additional disclosures only where they are material and decision-useful. Consider relevant GRI and SASB sector standards when assessing their relevance.
• Segment Suppliers
  Identify suppliers likely to be subject to CSRD requirements and tailor data requests accordingly. For smaller suppliers, consider proportionate approaches such as VSME reporting to improve response rates.
• Streamline Data Collection
  Review previously material datapoints and calculation methodologies and align them with ESRS 2.0 to avoid unnecessary recalculations.
• Align Assurance Planning
  Discuss the anticipated ESRS 2.0 disclosure scope with auditors early to confirm documentation requirements and improve audit readiness.

 

Conclusion

ESRS 2.0 significantly reduces reporting complexity through fewer datapoints, greater flexibility, and clearer application guidance. Companies should use the transition period to reassess materiality processes, streamline data collection, and focus reporting on information that is truly material and decision useful.

If you would like a non-binding consultation on ESRS 2.0 or have questions regarding sustainability reporting requirements in Switzerland or the EU, please contact us at sustainability@bdo.ch .