European Commission adopts revised reporting standards.

At the beginning of July – just two months after publishing the draft – the European Commission adopted the final version of the revised European Sustainability Reporting Standards (ESRS). The standards set reporting parameters in the areas of environmental, social and governance. Occupational safety and health is a key component of the social standard ‘ESRS S1 – Own Workforce’. The revision aims to simplify reporting obligations and significantly reduce the reporting burden for companies.

At the same time, the European Commission adopted the voluntary reporting standard for small and medium-sized enterprises (SMEs). The Corporate Sustainability Reporting Directive (CSRD) had previously been revised as part of the first Omnibus package and entered into force in its amended form on 18 March. As a result, the ESRS also had to be aligned with the new requirements.

Mandate for EFRAG: Streamlining reporting requirements

The objective of the revision was to substantially simplify the 2023 ESRS and reduce the reporting burden for companies. The European Financial Reporting Advisory Group (EFRAG) had been mandated by the European Commission to submit a technical proposal for the revision by the end of 2025. The process was preceded by several stakeholder consultations between spring and autumn 2025. EFRAG’s work focused primarily on reducing the number of mandatory data points. In addition, numerous voluntary data points were removed or converted into non-binding implementation guidance to support companies in applying the standards.

EFRAG proposal largely retained

The European Commission’s draft, published in May, largely followed EFRAG’s recommendations. Compared with the original ESRS, the number of mandatory data points was reduced by more than 60%, while the total number of data points was cut by more than 70%. In addition, the European Commission introduced a number of targeted amendments. According to the European Commission, these are intended to clarify certain provisions and provide companies with greater flexibility. For example, in line with the amendments to the CSRD under the Omnibus I package, companies may omit certain information under strict conditions where disclosure would seriously prejudice their competitive position. Furthermore, a one-year transitional period was introduced for companies using products containing substances of very high concern (SVHCs).

Implementation challenges remain

However, the widely criticised reporting requirements relating to occupational safety and health were not addressed. Neither EFRAG’s proposals nor the European Commission’s amendments include any substantial simplifications in this area. From the business community’s perspective, these requirements neither produce meaningful nor comparable information across the EU, while creating a disproportionate burden in terms of data collection and reporting. The requirements concerning occupational diseases continue to be regarded as particularly challenging.

With regard to reporting on occupational diseases, the sole clarification introduced is that certain information only has to be disclosed subject to legal restrictions. Whether this addition will actually resolve the existing implementation challenges remains uncertain. In some Member States, including Germany, companies are unable, or only able to a limited extent, to collect the relevant data due to the design of national systems and data protection requirements. Moreover, because occupational diseases often have long latency periods, the related data are of limited value in assessing a company's current sustainability performance.

Criticism from the business community

The revision of the ESRS has also attracted criticism beyond the area of occupational safety and health. Companies and their representative organisations question whether the deletions and conceptual simplifications introduced will provide any meaningful relief for reporting companies. They also point to continuing legal uncertainties, for example regarding definitions, reporting obligations and assessment criteria.

Outlook

The delegated act revising the ESRS and the delegated act establishing the voluntary reporting standard for SMEs were submitted to the European Parliament and the Council for scrutiny at the beginning of July. Both delegated acts will enter into force unless either the European Parliament or the Council objects within the two-month scrutiny period. This period may be extended once by a further two months. Whether the revised standards will actually reduce the practical challenges associated with reporting on occupational safety and health will only become clear once they are applied in practice.