Proposed revisions to the ESRS Social Standards: key observations

Additional authors: Wim Bartels, Jonty Genders and Sofia Bonomi

Key points

• The proposed revisions to the ESRS Social Standards (S1-S4) would reduce narrative disclosure requirements by more than 60% by using more of a principles-based approach.
• The revised standards require less detailed data breakdowns of information and allow more flexibility in how information is presented. Human rights policy content is simplified and brought together into a single section included in ESRS S2, and disclosures should consider alignment with internationally recognised standards.
• Whilst a number of data points would be removed from the standards, the core disclosure requirements on social topics and therefore the scope of topics being reported on remain intact. The revisions should nonetheless reduce the burden for companies of preparing reports, and better align the disclosures that are made with companies’ existing practices.

As part of the EU Simplification Omnibus Package, EFRAG was tasked by the European Commission to propose revisions to the ESRS to simplify and reduce what companies are required to report. In our previous blog, ‘What could the simplified ESRS Exposure Drafts mean for sustainability reporting strategies?’, we outlined the key elements of the proposal and what companies should consider doing now. In this follow-up, we examine more closely the proposed revisions to one element of the ESRS, the Social Standards (S1-S4).

Note: The exposure drafts (EDs) set out EFRAG’s proposals to revise and simplify ESRSs. The EDs do not include proposals on which entities are required to report under ESRSs and from which reporting period. These matters and other considerations, such as due diligence requirements and disclosures emanating from other EU legislation, are part of the omnibus proposals and are yet to be finalised under the EU legislative process. Until the new requirements are effective, entities that are in the first wave (i.e. required to report under the Corporate Sustainability Reporting Directive (CSRD) from periods commencing 1 January 2024) will still be required to apply the current ESRSs as issued by the EC.

The proposed revisions to the ESRS Social standards would reduce narrative disclosure requirements by more than 60% by using more of a principles-based approach, moving optional (“may”) disclosures to non-mandatory illustrative guidance (NMIG), and removing repeated information in the standards to create a clearer, more organised framework.

Table: Percentage reduction in data points and word count

The table summarises the reduction in the number of data points and word count resulting from the amendments to the ESRS standards.

Source: Basis for Conclusion for the draft amended ESRS, EFRAG,July 2025.

The revised standards require less detailed data breakdowns of information and allow more flexibility in how information is presented, utilising updated definitions and standard formulas for key workforce metrics. Many of the metrics from the social standards have been retained but simplified, with fewer breakdowns and less detailed disclosure required. For examples, please refer to the appendix below.

Human rights policy content is simplified and brought together into a single section included in ESRS S2, and disclosures should consider alignment with internationally recognised standards such as the UN Guiding Principles on Business and Human Rights, the ILO Declaration and the OECD Guidelines. While this consolidation mainly relates to policies, it also sets the foundation for how companies should describe their related actions, targets, and engagement with stakeholders.

Stakeholder engagement and grievance process disclosures are simplified, concentrating on their existence and effectiveness rather than on more extensive descriptions of internal processes.

Implications for Companies

Whilst a number of data points would be removed from the standards under the proposed revisions, the core disclosure requirements on social topics and therefore the scope of topics being reported on remain intact. The revisions should nonetheless reduce the burden for companies of preparing reports, and better align the disclosures that are made on material impacts, risks, and opportunities with companies’ existing human rights practices and in relation to key social topics such as workforce characteristics, health and safety, and diversity. Additionally, changes to methodologies and the simplification of non-employee information and other breakdowns of data points should result in more efficient disclosures on social topics.

Changes to the human rights policy disclosure requirements reduce overlap across the standards and make the requirements simpler to apply. If your company’s human rights due diligence already follows best practices aligned with international frameworks, you are likely well prepared.

Appendix: Some notable items removed or amended in the proposed revisions to the ESRS Social Standards (S1–S4) that are not included above (Note: this list is not exhaustive).

• Non-Employees
  
  
  • Non-employee reporting is now only required if non-employees, such as contractors or agency staff, are a significant part of your workforce or business model, and detailed breakdowns are no longer needed. Employee reporting has been simplified.
• Threshold for Country Reporting Updated
  
  
  • Country-level workforce reporting is now required for the (up to) ten countries with the largest numbers of employees, provided each has at least 50 employees. This replaces the previous requirement, which applied to any country making up 10% or more of the total workforce. (Note: this topic is subject to further discussion by EFRAG, beyond the consultation on the ESRS). This could conceivably in some circumstances result in an increased reporting requirement.
• Collective Bargaining and Social Dialogue
  
  
  • Reporting on collective bargaining and social dialogue now applies the same country-by-country thresholds as employee headcount. That is, disclosures are required only for the ten largest countries by employee count, provided each has at least 50 employees.
• Diversity Metrics
  
  
  • The requirement to disclose employee age distribution has been deleted.
  • Only gender at top management remains as a data point. Companies have flexibility to use the standard definition of “top management” (two levels below the administrative and supervisory bodies) or their own definition, as long as they disclose which definition they use.
• Adequate Wages
  
  
  • The method for defining “adequate wage” outside the EU has been revised and clarified.
    (Note: this topic is subject to further discussion by EFRAG, beyond the consultation on the ESRS.)
• Social Protection
  
  
  • Retirement has been removed as a major life event for social protection coverage.
  • Parental leave has been narrowed to maternity leave only.
  • The requirement to disclose which types of employees are not covered has been deleted.
• Disability Disclosures
  
  
  • The requirement to report information on employees with disabilities is subject to a company being legally allowed to collect this data.
• Health and Safety Metrics
  
  
  • Days lost due to work-related fatalities are no longer included; now, only days lost to work-related accidents, injuries, and ill health are required to be reported.
  • Fatalities due to ill health among non-employees are excluded.
• Work-Life Balance
  
  
  • Only the percentage of employees entitled to family-related leave is required.
• Incidents and Human Rights
  
  
  • The concept of “severe human rights incidents” has been removed; now, only “substantiated” human rights incidents need to be reported. These incidents must be based on verifiable and objective evidence, clarifying the materiality requirement.
  • Reporting of discrimination incidents also requires substantiation.