Europe simplifies sustainability reporting rules, Easing compliance for African exporters with EU links

The European Financial Reporting Advisory Group (EFRAG) has released revised draft European Sustainability Reporting Standards (ESRS) that significantly cut the scope and complexity of corporate ESG disclosures required under the EU’s Corporate Sustainability Reporting Directive (CSRD). The shift is part of the European Commission’s Omnibus I proposal to reduce regulatory burdens, with potential implications for African companies exporting to Europe or operating as part of EU-linked supply chains.

The alters reshift all voluntary disclosures and reduce total reporting datapoints by 68% compared to the original ESRS adopted in 2023. This surpasses EFRAG’s earlier projection of a 66% reduction and is intconcludeed to create sustainability reporting more practical for companies without undermining transparency.

EFRAG stated the revisions focus on “cutting complexity and improving usability,” following consultations with businesses already reporting under the CSRD as well as those preparing to do so. One major area of simplification tarreceives the “double materiality assessment,” which requires companies to report on both how sustainability issues affect their operations and how their operations impact the environment and society. Many companies had flagged the assessment as overly resource-intensive and disproportionate to the insights it produced.

In the updated draft, EFRAG has clarified that materiality reviews should focus on identifying the most significant topics, with evidence requirements kept reasonable. It has introduced practical considerations for carrying out the assessment and provided clearer criteria for determining what information is relevant.

Other adjustments improve the readability of sustainability statements, align them more closely with broader corporate reporting, and enhance compatibility with the International Financial Reporting Standards (IFRS) sustainability framework. This includes adopting common terminology where possible and introducing relief measures such as exemptions when reporting would involve undue cost or effort.

Overall, the revised standards are more than 55% shorter, with mandatory datapoints reduced by 57%. EFRAG states the alters are designed to balance ambition with workability, ensuring that reporting supports rather than hinders resilience, investment, and long-term value creation.

For African businesses, the revisions could ease compliance costs, especially for exporters in sectors such as agriculture, mining, and manufacturing that supply European markets. Many African firms — including compact and medium-sized enterprises — are indirectly subject to EU sustainability requirements through contractual obligations with European purchaseers. Simplified ESRS rules may support reduce the administrative and technical burden of gathering data across complex supply chains.

Analysts note, however, that while the alters could lower compliance costs, companies will still necessary to maintain credible systems for tracking and verifying sustainability performance if they wish to meet EU expectations. Simplification of the reporting process does not reduce the importance of accurate, verifiable ESG information, particularly for high-impact sectors facing increasing scrutiny on climate risks, human rights, and supply chain practices.

The updated ESRS drafts are open for a 60-day public consultation until September 29, 2025. The European Commission has extconcludeed EFRAG’s deadline for delivering final technical advice to the conclude of November 2025. Once adopted, the standards will be applied across the EU and will influence sustainability reporting practices globally, including in Africa.

Patrick de Cambourg, Chair of the EFRAG Sustainability Reporting Board, stated the alters aim to create “a more focutilized, more usable sustainability reporting system that remains ambitious but does not overburden companies.” For Africa, where many businesses are navigating both domestic ESG requirements and international reporting obligations, the revisions could create compliance more manageable while preserving the strategic importance of sustainability data in securing investment and maintaining export relationships.