I will begin with a brief explanation of the sources on which I base the following conclusions. The webinar I am writing about was organized by Frank Bold, and a recording of it will soon be available. It was attended by over 400 people from a number of countries, mainly from Central Europe. Chiara del Prete, Filip Gregor, Anna Dauteuil, and I discussed changes in standards and answered questions from participants. In turn, a group of experts who participated in the preparation of our clients' reports for the 2023 and 2024 reporting cycles worked on the MATERIALITY response draft in EFRAG public consultations.
Almost everyone appreciates the effect of EFRAG's work, which is evident in the significant (by over 67%) reduction in the number of data points. However, some people recognize that in some places the cuts have gone too far and this may lead to less comparable information in reports or to overly general disclosures, primarily regarding policies and activities.
Many representatives of listed companies required to report would like to use simplified standards as early as the next reporting cycle. Unfortunately, this is not possible. The new standards will not be issued by the Commission until mid-2026, and they will only be available for use in reporting for that year. Of course, there is nothing to prevent reporting companies from voluntarily using simplified ESRSs earlier.
The principle of „excessive cost or effort” introduced into the standards has been generally well received, but some people are asking very pertinent questions about the specifics. How will it be applied in practice? Will there be additional guidelines to clearly define what constitutes excessive cost or effort and what does not? What if the reporting company and the certifying auditor interpret this principle differently? Unfortunately, there are no answers to these questions today; we will have to wait for reporting practices to develop.
Some of the questions revolved around the lack of sector-specific standards and the growing role of company-specific disclosures in this situation. EFRAG cannot say for sure today whether sector-specific (non-binding) guidance will be issued, but I believe it is highly likely. The narrative regarding the sectoral approach has changed significantly, especially on the part of company representatives. There are no longer concerns about additional burdens, but rather expectations for guidance and explanations that will make it easier to apply common standards in companies from specific industries.
Many questions concerned auditing practice. Could the new ESRS specify what documentation a company should collect for certification purposes? Could they specify what procedures a certified auditor should follow when examining a report? Here, too, the answer is clear: no, ESRSs do not and cannot contain such provisions. They are reporting standards, and the needs of companies indicated in the questions should be addressed in the attestation standard. In my opinion, the Commission should issue such a standard, which would significantly streamline the report attestation process and lead to cost reductions for companies. There are no such plans at the moment, but I am convinced that the Commission will change its mind if a sufficient number of companies report this need.
The detailed questions asked during the webinar show how many people have carefully read the draft simplified ESRS. I hope that most of them will take part in the consultation. It will only last until next Monday, September 29, 2025. I encourage you to participate too! You can find all the information on how to do this at on the EFRAG website with drafts of new standards i in my post dated August 11, 2025.
P.S. MATERIALITY is currently recruiting for the position of Senior Sustainability Specialist. If you, or someone you know, are looking for further development in the field of sustainability, want to deal with interesting topics and work in a great team, then I cordially invite you to apply 😊 The announcement is available at this address, and recruitment will continue until October 2, 2025.
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