The European Union’s effort to simplify its corporate sustainability reporting regime is facing pushback from impact investors, who warn that the proposed changes risk weakening transparency and accountability.
The European Financial Reporting Advisory Group (EFRAG) recently concluded a two-month consultation on revisions to the European Sustainability Reporting Standards (ESRS). The main goal is to reduce compliance burdens under the Corporate Sustainability Reporting Directive (CSRD), which mandates firms to disclose environmental, social and governance (ESG) data.
EFRAG plans to deliver final recommendations to the European Commission by 30 November. The proposals would cut mandatory data points by more than half and streamline structure and language across the standards.
“These revisions aim to deliver what Europe needs at this moment: a more focused, more usable sustainability reporting system that remains ambitious but does not overburden companies,” said Patrick de Cambourg, chair of EFRAG’s Sustainability Reporting Board.
However, leading sustainability groups argue that the simplification could come at the cost of integrity. Santiago Sueiro of GSG Impact said, “Sustainability rules like CSRD/ESRS and CSDDD are foundations for growth, resilience, and investment in solutions that create long-term value for people and planet. They are not red tape.”
The Global Reporting Initiative (GRI) and Principles for Responsible Investment (PRI) raised similar concerns, warning that reduced disclosures could limit comparability, distort investor decisions, and hinder global alignment with standards such as those set by the ISSB.
GRI’s CEO Robin Hodess said simplification should “acknowledge global reporting norms, enhance accountability and create decision-useful information for companies and their stakeholders.”