The EU Council Eases ESG Rules More Than Proposed in the Omnibus: What Will Change for Businesses?

The EU Council has approved simplifications to ESG reporting rules — and they turned out to be even more flexible than expected.

EFRAG, the main standard-setter, is proposing a fundamentally new approach: less unnecessary detail, more substance.

Companies should start preparing now to be ready for the 2024–2025 reporting period.

What does EFRAG propose and how could this change the reporting approach?

1) Less unnecessary detail: top-down materiality analysis

Double materiality remains in force, but with a nuance: not all topics need to be analyzed in detail if they are not relevant to the business model or industry context. More analysis — less automatism.

2) Three-zone report structure — a new readability standardReporting will become more structured:

• The governance section will include a strategic and concise part;
• The mandatory block will focus only on ESRS requirements;
• Technical appendices will now be the place for detailed data.

3) Materiality principle — now also for policies and targets

Only what actually exists and is meaningful will remain in the report. No more formal “empty” policies included just for compliance.

4) Fewer misunderstandings between business and auditors

EFRAG aims to clearly distinguish between what is mandatory and what is voluntary. Previously, many companies spent resources on disclosures that were not required.

5) Report volume: focus only on what is relevant

Detailed descriptions and repetitive sections without practical value will become optional. The emphasis will be on what is material for management and decision-making.

6) Alignment with ISSB and the GHG Protocol

EFRAG aims for maximum alignment with international initiatives — particularly IFRS S1/S2 and the GHG Protocol. This will simplify the integration of different reporting frameworks.

What to expect next?

The following timeline is anticipated:

• July 2025 — publication of draft proposals
• Autumn 2025 — public consultations
• End of 2025 — final recommendation to the European Commission

Important: The current proposals are not final. However, companies reporting for 2024–2025 should already assess the potential impact of these changes. ESG Liga PAEW will continue to monitor developments, update templates, and provide analytical tools as soon as more details become available.

More details: https://ukraine-oss.com/rada-yes-pomyakshuye-esg-pravyla.../