AUTHOR: EMILY BIRD
READ TIME: 9 MINS

After a period of confusion and retooling, the simplified European Sustainability Reporting Standards have been unveiled. Sustainability Consultant Emily Bird evaluates the reduced set of disclosure requirements and what the new CSRD means for your business. The ‘what’ and the ‘who’ are now much clearer, she says. But the ‘when’? Not so much…

The EU Corporate Sustainability Reporting Directive (CSRD) was introduced to take sustainability reporting to the next level. The goal? More transparency. More depth. More comparable data. But with the thousands (quite literally) of mandatory data points and strict requirements, the regulation faced backlash from businesses and sustainability professionals alike.

As a result, the EU Commission put forward a CSRD Omnibus package in February 2025 with the aim of streamlining the requirements and making them easier to report against. After an arduous journey and considerable anticipation, the Simplified European Sustainability Reporting Standards (ESRS) were finally agreed on 16 December 2025.

The CSRD Omnibus has achieved exactly what it set out to do: it’s significantly reduced the disclosure burden. Both by narrowing the scope and by reducing the requirements of the regulation itself through the Simplified ESRS.

Who has to comply? 

The Omnibus has drastically raised the thresholds that companies need to reach before they’re in scope, meaning only the largest will be obliged to report in line with the regulations. So, around 80–90% of companies originally under CSRD will now essentially be ‘off the hook’, though companies of any size can choose to comply voluntarily. Some might decide to do this to increase their transparency and comparability with their larger peers. 

For EU companies: 

• 1000+ employees 

• €450m+ net turnover 

• Listed subsidiaries and financial holdings are exempt 

For non-EU companies: 

• €450m+ net turnover in the EU for at least 2 consecutive years 
• If non-EU parent company is within scope, its subsidiaries with a net turnover of €200m are also in scope

When do the new rules come into force?  

Unfortunately, this isn’t a straightforward answer. EU business is currently in a limbo state between policy intent and legal reality. For the most part, UK wave 2 companies are looking at publishing simplified ESRS in 2028 – but timelines still depend on where your primary listing or predominant business activity sits. 

The CSRD is an EU directive – it’s not an enforceable law in itself. Each member state needs to transpose it into national law before there’s a legal obligation to report against it. Member states have until 2028 to transpose the new simplified CSRD, although we expect states to be pushing this through quickly. 

Transposition into law sounds simple enough. But in practice, different national approaches and timelines create real uncertainty.  

WAVE 1: TRANSPOSITION  

Companies in the 17 member states that have already transposed the original CSRD (including France, Italy and Norway) will still have to comply with the original CSRD until the law is updated to reflect the simplified directive. To make matters even more complex, there are subtle differences in the way the regulations have been implemented across member states.  

However, while the full CSRD still technically remain in force, in reality we can anticipate a more pragmatic approach, with regulators more likely to focus on ‘good faith reporting’. If you’re making a genuine effort to comply, they probably won’t be coming for you over granular detail. Some states may even publish interim guidance.  

WAVE 1: THE QUICK FIX 

A number of states did not transpose the original CSRD. Companies headquartered in these states will instead rely on the ‘Quick Fix’ delegated regulation for financial years 2025 and 2026.  

The Quick Fix essentially extends phase-in reliefs, allowing companies to continue omitting some more complex data points while in this transitional period. The idea is to avoid companies having to significantly rework sustainability statements every year. 

As you may have realised, there’s usually a ‘but’ with CSRD… The Quick Fix only applies to financial years starting on or after 1 January 2025. If a company’s first CSRD reporting year starts before this date, it’ll miss the Quick Fix for that first report and will have to report without the benefit of the extended reliefs. 

WAVE 2 AND BEYOND 

For those companies that had not already started reporting (and are afforded the luxury of the ‘stop the clock’ directive), the answer is still not straightforward. In essence, it again boils down to individual member states transposing simplified CSRD into law.  

The current assumption is that wave 2 companies will report against simplified ESRS in 2028, with wave 3 following in 2029. By that time, the simplified CSRD should have been transposed by all member states. 

The caveat here is that state law always trumps EU directives. If a member state decides to instigate either full or simplified CSRD earlier or later than advised by the EU, companies with significant business activity in that state must abide with local law. 

How does the Simplified ESRS actually streamline CSRD?

FROM A CHECKLIST TO A PRINCIPLES-BASED APPROACH   

In practice, ESRS 1.0 translated to a long checklist of data points which all had to be ticked to stay safe. This led to bloated reports full of granular but irrelevant minutiae.  

Instead, the Simplified ESRS adopts a principles-based approach: asking companies to critically assess whether information is actually useful and relevant to understanding the business.  

Increased integration with IFRS and GHG Protocol means the end product is a more realistic and logical regulation that cuts immaterial detail, reduces repetition and gives companies more autonomy to focus on what genuinely matters.

REDUCED DATA POINTS 

Firstly, and probably most critically, the number of data points has decreased by 61%. The value-add for preparers is evident: less data = less time needed for collation and verification. 

MORE REALISTIC DATA EXPECTATIONS 

There’s now no need for perfect primary data. Instead, you can use estimates, proxies and ‘best available’ data, reducing complexity and simplifying data collection processes.  

An almost impossible hurdle for companies within the original requirements was the need to include data across the entire value chain. The Simplified ESRS now only calls for value chain data where is it actually material and feasibly obtainable. 

MORE SUBJECTIVE AND STABLE DOUBLE MATERIALITY ASSESSMENT 

Previously, the DMA process often turned into massive bottom-up spreadsheet exercises. It meant trawling through never-ending topic lists to note every single topic that may or may not have been material.   

A clarified DMA removes that obligation by allowing companies to use their informed and proportionate judgement to create a list of potential material topics, based on what they know about the sector and the business itself.  

With no requirement to report non-material data and no need to refresh materiality annually (unless something changes significantly), the DMA at the heart of the CSRD is now more stable, logical and consistent. 

What does this mean for CSRD reporting?

While the simplification of ESRS is significant and drastic, the bones of the CSRD remain unchanged.  

If you’d like to explore a simpler approach to CSRD reporting that aligns better with what’s material to your business, please get in touch.