Skip to main content

Top Menu

  • Om FRA
  • Samarbejde
  • Newsroom
  • Cookies
  • Contact

Select site language

  • Български
  • Čeština
  • Dansk
  • Deutsch
  • Ελληνικά
  • English
  • Español
  • Eesti
  • Suomi
  • Français
  • Gaeilge
  • Hrvatski
  • Magyar
  • Italiano
  • Lietuvių
  • Latviešu
  • Malti
  • Nederlands
  • Polski
  • Português
  • Română
  • Slovenčina
  • Slovenščina
  • Svenska

Custom Topbar

Home

Search the FRA website

      • Work on rights
        • Retfærdighed, ofres rettigheder og retligt samarbejde
          • Ofrenes rettigheder
          • Forsvarets rettigheder
          • Civilret
          • Retligt samarbejde og retssamfund
          • Sikkerhed
          • Erhvervslivet og menneskerettigheder
        • Ligestilling, ikkeforskelsbehandling og racisme
          • Børn, unge og ældre
          • Mennesker med handicap
          • Hadforbrydelser
          • Racemæssig eller etnisk baggrund
          • Religion og tro
          • Roma
          • Sex, seksuel orientering og kønsidentitet
        • Asyl, migration og grænser
          • Adgang til asyl
          • Grænser og informationssystemer
          • Beskyttelse af børn
          • Irregulær migration, tilbagesendelse og tilbageholdelse i forbindelse med immigration
          • Regulær migration og integration
          • Ulovlig handel og udnyttelse af arbejdskraften
        • Databeskyttelse, privatlivets fred og ny teknologi
          • Kunstig intelligens og big data
          • Grænser og informationssystemer
          • Databeskyttelse
          • Ulovlig profilering
        • Støtte til menneskerettighedssystemer og -forkæmpere
          • EU's charter om grundlæggende rettigheder
          • Mellemstatslige menneskerettighedssystemer
          • Nationale menneskerettighedssystemer og -organer
          • Civilsamfundet
        • Environmental and social sustainability
          • Climate change and environmental protection
          • Just and green transition
          • Business and human rights
          • Human rights due diligence
          • Consumer protection
      • EU's charter om grundlæggende rettigheder
        • Hvad er grundlæggende rettigheder?
        • What is the EU Charter of Fundamental Rights?
        • Præambel
        • Afsnit I: Værdighed
          • 1 - Den menneskelige værdighed
          • 2 - Ret til livet
          • 3 - Ret til respekt for menneskets integritet
          • 4 - Forbud mod tortur og umenneskelig eller nedværdigende behandling eller straf
          • 5 - Forbud mod slaveri og tvangsarbejde
        • Afsnit II: Friheder
          • 6 - Ret til frihed og sikkerhed
          • 7 - Respekt for privatliv og familieliv
          • 8 - Beskyttelse af personoplysninger
          • 9 - Ret til at indgå ægteskab og ret til at stifte familie
          • 10 - Ret til at tænke frit og til samvittigheds
          • 11 - Ytrings
          • 12 - Forsamlings
          • 13 - Frihed for kunst og videnskab
          • 14 - Ret til uddannelse
          • 15 - Erhvervsfrihed og ret til at arbejde
          • 16 - Frihed til at oprette og drive egen virksomhed
          • 17 - Ejendomsret
          • 18 - Asylret
          • 19 - Beskyttelse i tilfælde af udsendelse, udvisning og udlevering
        • Afsnit III: Ligestilling
          • 20 - Lighed for loven
          • 21 - Ikke-forskelsbehandling
          • 22 - Kulturel, religiøs og sproglig mangfoldighed
          • 23 - Ligestilling mellem kvinder og mænd
          • 24 - Børns rettigheder
          • 25 - Ældres rettigheder
          • 26 - Integration af mennesker med handicap
        • Afsnit IV: Solidaritet
          • 27 - Ret til information og høring af arbejdstagerne i virksomheden
          • 28 - Forhandlingsret og ret til kollektive skridt
          • 29 - Ret til arbejdsformidling
          • 30 - Beskyttelse i tilfælde af ubegrundet opsigelse
          • 31 - Retfærdige og rimelige arbejdsforhold
          • 32 - Forbud mod børnearbejde og beskyttelse af unge på arbejdspladsen
          • 33 - Familieliv og arbejdsliv
          • 34 - Social sikring og social bistand
          • 35 - Sundhedsbeskyttelse
          • 36 - Adgang til tjenesteydelser af almen økonomisk interesse
          • 37 - Miljøbeskyttelse
          • 38 - Forbrugerbeskyttelse
        • Afsnit V: Borgerrettigheder
          • 39 - Stemmeret og valgbarhed til Europa-Parlamentet
          • 40 - Stemmeret og valgbarhed til kommunale valg
          • 41 - Ret til god forvaltning
          • 42 - Ret til aktindsigt
          • 43 - Den Europæiske Ombudsmand
          • 44 - Ret til at indgive andragender
          • 45 - Fri bevægelighed og opholdsret
          • 46 - Diplomatisk og konsulær beskyttelse
        • Afsnit VI: Retfærdighed i retssystemet
          • 47 - Adgang til effektive retsmidler og til en upartisk domstol
          • 48 - Uskyldsformodning og ret til et forsvar
          • 49 - Legalitetsprincippet og princippet om proportionalitet mellem lovovertrædelse og straf
          • 50 - Ret til ikke at blive retsforfulgt eller straffet to gange for samme lovovertrædelse
        • Afsnit VII: Almindelige bestemmelser
          • 51 - Anvendelsesområde
          • 52 - Rækkevidde og fortolkning af rettigheder og principper
          • 53 - Beskyttelsesniveau
          • 54 - Forbud mod misbrug af rettigheder
      • Tools
        • EU Fundamental Rights Information System - EFRIS
        • Criminal detention database
        • Anti-Muslim hatred database
        • National human rights structures navigator
        • Case-law database
        • Charterpedia
        • FRA e-learning platform
        • Data visualisation
        • Equality data collection: promising practices
        • Fighting hate crime: promising practices
      • Produkter
    • About FRA
      • Who we are
        • Structure of FRA
        • Management Board
          • Management Board members
          • Management Board meeting documents
        • Executive Board
        • Scientific Committee
          • Scientific Committee members
        • Director
        • Management team
      • What we do
        • Research and data
        • Capacity-building
        • Advising
        • Convening people
        • FRA for children
          • What are my rights?
          • Where do my rights come from?
        • Areas of work
          • Multi-annual Framework 2007-2022
        • Work Programme
          • Archive
        • Annual Activity report
          • Archive
        • Projects
      • Working at FRA
        • Vacancies and selections
          • Previous vacancies
        • What we offer
        • Work-life balance
        • Application instructions
        • Seconded National Experts
        • Traineeship
        • Study visits at FRA
      • Procurement
        • Ongoing procedures
        • Closed procedures
        • Contracts awarded
      • Finance and budget
        • Financial Rules
        • Financial documents
      • Aktindsigt
        • Access to documents
        • Anmodningen om aktindsigt
      • Data protection within FRA
        • Records registry
    • Cooperation
      • EU-institutionerne og andre -organer
        • European Parliament
        • Council of the European Union
        • European Commission
        • EU agencies
          • Justice and Home Affairs Agencies Network
        • European Committee of the Regions
        • European Economic and Social Committee
        • European Ombudsman
        • EU CRPD Framework
          • Promotion
          • Protection
          • Monitoring
          • Review process
          • Resources
      • EU’s medlemsstater
        • National Liaison Officers
        • National Parliaments
      • Europarådet
      • Civilsamfundet og platformen for grundlæggende rettigheder
        • Activities
        • Civic space
        • Platform library
        • How to register
      • Nationale menneskerettighedsinstitutioner, ligestillingsorganer samt ombudsmandsinstitutioner
      • FN, OSCE og andre internationale organisationer
        • EEA and Norway Grants
      • FRANET
    • Newsroom
      • Media contacts
      • News
      • Press releases
      • Stories
      • Events
        • Past Events
      • FRA products 2026
        • FRA products 2025
        • FRA products 2024
        • FRA products 2023
        • FRA products 2022
        • FRA products 2021
        • FRA Products 2020
        • FRA Products 2019
      • Multimedia
        • Videos
        • Infographics
        • Podcasts
      • Speeches
      • Press packs
        • EU LGBTIQ survey - Press pack
        • Fundamental Rights Survey
        • EU LGBTI survey II
        • From institutions to community living for persons with disabilities: perspectives from the ground
        • Second European Union Minorities and Discrimination Survey – Main results
        • Second European Union Minorities and Discrimination Survey (EU-MIDIS II) Muslims
        • Together in the EU: Promoting the participation of migrants and their descendants
        • Second European Union Minorities and Discrimination Survey (EU-MIDIS II) Roma
        • Severe labour exploitation in the EU
        • Child-friendly justice – perspectives and experiences of professionals: Press pack
        • Fundamental rights at EU borders
        • Violence against women press pack
        • Jewish people’s experiences and perceptions of hate crime, discrimination and antisemitism
        • EU LGBT Press pack
        • Child-friendly justice – perspectives and experiences of children
      • Newsletter
    • Account
      • Log in

Main menu

Home
  • Work on rights
    Work on rights
    • Retfærdighed, ofres rettigheder og retligt samarbejde
      • Ofrenes rettigheder
      • Forsvarets rettigheder
      • Civilret
      • Retligt samarbejde og retssamfund
      • Sikkerhed
      • Erhvervslivet og menneskerettigheder
    • Ligestilling, ikkeforskelsbehandling og racisme
      • Børn, unge og ældre
      • Mennesker med handicap
      • Hadforbrydelser
      • Racemæssig eller etnisk baggrund
      • Religion og tro
      • Roma
      • Sex, seksuel orientering og kønsidentitet
    • Asyl, migration og grænser
      • Adgang til asyl
      • Grænser og informationssystemer
      • Beskyttelse af børn
      • Irregulær migration, tilbagesendelse og tilbageholdelse i forbindelse med immigration
      • Regulær migration og integration
      • Ulovlig handel og udnyttelse af arbejdskraften
    • Databeskyttelse, privatlivets fred og ny teknologi
      • Kunstig intelligens og big data
      • Grænser og informationssystemer
      • Databeskyttelse
      • Ulovlig profilering
    • Støtte til menneskerettighedssystemer og -forkæmpere
      • EU's charter om grundlæggende rettigheder
      • Mellemstatslige menneskerettighedssystemer
      • Nationale menneskerettighedssystemer og -organer
      • Civilsamfundet
    • Environmental and social sustainability
      • Climate change and environmental protection
      • Just and green transition
      • Business and human rights
      • Human rights due diligence
      • Consumer protection
  • EU's charter om grundlæggende rettigheder
    EU's charter om grundlæggende rettigheder
    • Hvad er grundlæggende rettigheder?
    • What is the EU Charter of Fundamental Rights?
    • Præambel
    • Afsnit I: Værdighed
      • 1 - Den menneskelige værdighed
      • 2 - Ret til livet
      • 3 - Ret til respekt for menneskets integritet
      • 4 - Forbud mod tortur og umenneskelig eller nedværdigende behandling eller straf
      • 5 - Forbud mod slaveri og tvangsarbejde
    • Afsnit II: Friheder
      • 6 - Ret til frihed og sikkerhed
      • 7 - Respekt for privatliv og familieliv
      • 8 - Beskyttelse af personoplysninger
      • 9 - Ret til at indgå ægteskab og ret til at stifte familie
      • 10 - Ret til at tænke frit og til samvittigheds
      • 11 - Ytrings
      • 12 - Forsamlings
      • 13 - Frihed for kunst og videnskab
      • 14 - Ret til uddannelse
      • 15 - Erhvervsfrihed og ret til at arbejde
      • 16 - Frihed til at oprette og drive egen virksomhed
      • 17 - Ejendomsret
      • 18 - Asylret
      • 19 - Beskyttelse i tilfælde af udsendelse, udvisning og udlevering
    • Afsnit III: Ligestilling
      • 20 - Lighed for loven
      • 21 - Ikke-forskelsbehandling
      • 22 - Kulturel, religiøs og sproglig mangfoldighed
      • 23 - Ligestilling mellem kvinder og mænd
      • 24 - Børns rettigheder
      • 25 - Ældres rettigheder
      • 26 - Integration af mennesker med handicap
    • Afsnit IV: Solidaritet
      • 27 - Ret til information og høring af arbejdstagerne i virksomheden
      • 28 - Forhandlingsret og ret til kollektive skridt
      • 29 - Ret til arbejdsformidling
      • 30 - Beskyttelse i tilfælde af ubegrundet opsigelse
      • 31 - Retfærdige og rimelige arbejdsforhold
      • 32 - Forbud mod børnearbejde og beskyttelse af unge på arbejdspladsen
      • 33 - Familieliv og arbejdsliv
      • 34 - Social sikring og social bistand
      • 35 - Sundhedsbeskyttelse
      • 36 - Adgang til tjenesteydelser af almen økonomisk interesse
      • 37 - Miljøbeskyttelse
      • 38 - Forbrugerbeskyttelse
    • Afsnit V: Borgerrettigheder
      • 39 - Stemmeret og valgbarhed til Europa-Parlamentet
      • 40 - Stemmeret og valgbarhed til kommunale valg
      • 41 - Ret til god forvaltning
      • 42 - Ret til aktindsigt
      • 43 - Den Europæiske Ombudsmand
      • 44 - Ret til at indgive andragender
      • 45 - Fri bevægelighed og opholdsret
      • 46 - Diplomatisk og konsulær beskyttelse
    • Afsnit VI: Retfærdighed i retssystemet
      • 47 - Adgang til effektive retsmidler og til en upartisk domstol
      • 48 - Uskyldsformodning og ret til et forsvar
      • 49 - Legalitetsprincippet og princippet om proportionalitet mellem lovovertrædelse og straf
      • 50 - Ret til ikke at blive retsforfulgt eller straffet to gange for samme lovovertrædelse
    • Afsnit VII: Almindelige bestemmelser
      • 51 - Anvendelsesområde
      • 52 - Rækkevidde og fortolkning af rettigheder og principper
      • 53 - Beskyttelsesniveau
      • 54 - Forbud mod misbrug af rettigheder
  • Tools
    Tools
    • EU Fundamental Rights Information System - EFRIS
    • Criminal detention database
    • Anti-Muslim hatred database
    • National human rights structures navigator
    • Case-law database
    • Charterpedia
    • FRA e-learning platform
    • Data visualisation
    • Equality data collection: promising practices
    • Fighting hate crime: promising practices
  • Produkter

You are here

  • Home
  • Work On Rights
  • Environmental and social sustainability
  • Opinion on Draft Simplified European Sustainability Reporting Standards
FRA, 2026
25
February
2026

Opinion on Draft Simplified European Sustainability Reporting Standards

Environmental and social sustainability
Climate change and environmental protection
Consumer protection
This FRA Opinion on the draft simplified European Sustainability Reporting Standards informs the European Commission ahead of the standards’ adoption. This Opinion applies a risk-based human rights approach to assess whether the proposed simplifications preserve essential safeguards for people adversely affected by corporate activities. The Opinion provides practical, proportionate suggestions to strengthen the simplified framework and ensure that efficiency gains do not come at the expense of fundamental rights.
  • Read Online
  • Related
Export to PDF
Search inside this publication
  • Preamble
  • Executive summary
  • Abbreviations
  • 1. Introduction
    • 1.1. Scope of the analysis
    • 1.2. Legal and policy context
    • 1.3. Why it matters for fundamental rights?
  • 2. Cross-cutting Standards
    • 2.1. ESRS 1 – General Requirements
    • 2.2. ESRS 2 – General Disclosures
  • 3. Social Standards
    • 3.1. Cross-cutting
    • 3.2. S1 – Own Workforce
    • 3.3. S2 – Workers in the Value Chain, S3 – Affected Communities, and S4 – Consumers and End-users
  • 4. Environmental Standards
  • About this publication


2. Cross-cutting Standards


2.1. ESRS 1 – General Requirements


  1. The draft simplified ESRS 1 are reorganised around three principles: (i) the principle of double materiality as the primary filter for what must be reported; (ii) a fair presentation principle that requires a true, balanced and comprehensive depiction of material impacts, risks and opportunities (IROs); and (iii) greater flexibility in structure and evidence, including reduced data point burdens and phased reliefs. Taken together, these amendments aim to streamline reporting and improve clarity.

Definition: double materiality

As ‘the basis for sustainability reporting’, double materiality affirms that undertakings must only report on sustainability matters identified as material.

A sustainability matter is considered material if it has actual or potential, positive or negative, impacts on people or the environment (impact materiality) or on one’s financial position or performance, cash flows or access to finance (financial materiality) or both.

Impacts may relate to the undertaking’s own operations or its upstream and downstream value chain.

The double materiality approach aligns with key international standards such as the GRI Standard.

Source: EFRAG, Draft Simplified ESRS 1 General Requirements, EFRAG, Brussels, 2025

  1. Under the amended approach to double materiality assessment, undertakings may choose either a high-level, topical approach – deciding whether broad topics such as ‘workers in the value chain’ or ‘affected communities’ are material, which simplifies the process – or a more granular analysis at the subtopic or data point level – a top-down approach that allows more in-depth disclosure where necessary.
  2. Under the amended act, key concepts have been clarified and reinforced, including that double materiality encompasses both impact materiality – focusing on the undertaking’s significant (positive and negative) impacts on people and the environment – and financial materiality – focusing on how sustainability-related risks and opportunities affect the undertaking’s financial position, development, performance and enterprise value. Both dimensions must be linked to a clearly defined sustainability topic.
  3. This dual concept is pivotal to the ESRS’ architecture under the CSRD, serving as the foundationof the sustainability reporting regime and determining which information must be disclosed. It also distinguishes the ESRS approach from global standards such as IFRS S1 and S2, established by the International Sustainability Standards Board (ISSB), which apply only a single materiality lens focused on enterprise value (i.e. information material to investors and financial performance) [16] Chetan, H., Hong TW., (2023), The European Sustainability Reporting Standards v. International Sustainability Standards Board: What are the differences?, September 2025.
    . The amendments further reinforce the definition of materiality as encompassing IROs linked to sustainability topics, and clarify how undertakings should transition from identifying material matters to disclosing policies, actions and metrics.

Definition: fair presentation principle

Fair presentation aims for a sustainability statement that considers ‘the overall picture of the reported information’.

It requires the disclosure of relevant information on IROs in a ‘complete, neutral and accurate’ manner, in order to achieve a faithful representation.

Fair presentation also requires that the disclosed information be ‘comparable, verifiable and understandable’. Additional information (or entity-specific information) may be disclosed if necessary to ensure fair representation.

Source: EFRAG, Draft Simplified ESRS 1 General Requirements, EFRAG, Brussels, 2025.

  1. The simplified ESRS 1 introduces an overarching fair presentation principle, aligning it with international reporting norms such as the GRI standards [17] See GRI 1: Foundation 2021 at Global Reporting Initiative (GRI), ‘Universal standards (GRI 1, GRI 2, GRI 3)’, GRI website.
    and the ISSB standards [18] See International Financial Reporting Standards (IFRS) Foundation, IFRS S1: General requirements for disclosure of sustainability-related financial information, London, paragraphs 11–16.
    . Under this principle, undertakings must ensure that their sustainability statements give a true, balanced and comprehensive view of material IROs, going beyond mere tick-box compliance. In practice, this requires reporting all relevant information needed for a faithful depiction of sustainability matters – including adding entity-specific disclosures if the standard metrics are insufficient [19] EFRAG, Draft ESRS 1: General requirements – November 2025, Brussels, 2025, Section 2 as amended.
    .
  2. The draft simplified ESRS 1 also provides greater flexibility in reporting structure by allowing a more narrative, principle-based approach to explaining policies, actions and targets, rather than a standardised checklist. Undertakings may present information in the way that best describes how they manage sustainability matters, as long as it is complete and meets the disclosure objectives. This links to the new optional executive summary [20]  EFRAG, Draft simplified ESRS 1- General requirements, para 111 as amended.
    feature – undertakings can include a high-level overview for senior audiences while moving detailed data into annexes, improving readability. Importantly, ESRS 1 still mandates that if an undertaking has a material sustainability topic not covered by one of the existing ESRS (e.g. a sector-specific issue), it must provide an entity-specific disclosure [21] EFRAG, Draft ESRS 1: General requirements – November 2025, Brussels, 2025, paragraph 11 as amended.
    on that topic. This requirement is maintained to ensure that no material issue is omitted simply because the standards do not explicitly list it.
  3. Crucially, the volume of mandatory data points is significantly reduced across the ESRS. EFRAG’s draft revisions cut the number of mandatory quantitative metrics and detailed breakdowns by over 60 %, while suppressing all voluntary data points. In ESRS 1, this is reflected by reducing application requirements (ARs) and guidance, as many prescriptive details are moved to non-mandatory guidance or deleted.
  4. Additionally, phase-in provisions and reliefs are built into ESRS 1’s requirements, introducing or extending grace periods for particularly complex disclosures, and exemptions for ‘undue cost or effort’ [22]  EFRAG, Draft simplified ESRS 1- General requirements, Section 7.4 as amended.
    .

Human rights impact and legal analysis

Double materiality

  1. Maintaining the double materiality principle is essential for human rights transparency and accountability. ESRS 1’s framework requires undertakings to report not only on financially significant sustainability risks, but also on material impacts on people and the environment [23] EFRAG, Draft ESRS 1: General requirements – November 2025, Brussels, 2025, paragraph 2 as amended.
    . This principle operationalises the approach of the UNGPs and the Guidelines for Multinational Enterprises on Responsible Business Conduct devised by the Organisation for Economic Co-operation and Development (OECD) (hereafter ‘OECD Guidelines’), and is aligned with the Charter’s relevant provisions, for example the prohibition of slavery and forced labour (Article 5), non-discrimination (Article 21), the protection of children’s rights (Article 24) and the right to fair and just working conditions (Article 31).
  2. Double materiality is therefore essential from a human rights perspective and should neither be further streamlined nor removed. The proposed streamlining of and clarifications to the (double) materiality assessment provide clearer, less burdensome guidance in ESRS 1, enabling undertakings to focus on the most serious and relevant human rights issues, which is consistent with a risk-based approach. In terms of impact materiality, the emphasis on severity (looking at the scale, scope and irremediable character of impacts [24] EFRAG, Draft ESRS 1: General requirements – November 2025, Brussels, 2025, Section 2.1 and application requirement 20 as amended.
    ensures that issues like fatalities, child exploitation and environmental disasters are considered material regardless of financial magnitude. In particular, including factors that influence the existence of negative impacts in a specific context of the geography such as conflict-affected and high-risk areas, fosters alignment with OECD Guidelines without undue burden on reporting undertakings.
  3. However, several legal and substantive risks may arise from the manner in which double materiality is operationalised in the simplified ESRS 1. It should not be used for the summary dismissal of issues as ‘non-material’, which could result in certain human rights issues receiving insufficient attention. For example, companies may label subtle human rights or environmental impacts (low scale /short term) non-material via business model assumptions, omitting disclosures despite UNGPs alignment needs. Also, newly added ‘information materiality’ permits omitting some details within material topics, leading to ‘fair presentation’ claims that exclude impact depth (see paragraphs 32–35). Specifically, the simplified ESRS 1 deletes the blanket requirement to consider all ESRS topics and now explicitly allows a ‘top-down’ materiality approach focusing on obviously material topics [25] EFRAG, Draft ESRS 1: General requirements – November 2025, Brussels, 2025, Section 2.1 and application requirement 17 as amended.
    . This top-down approach permits undertakings to determine at a high level whether a sustainability topic is material – without requiring an assessment of specific subtopics or data points unless the broader topic is flagged as material through the undertaking’s own materiality assessment process. While this adds flexibility, it risks overlooking human rights risks that may not be visible at the aggregate level. For example, under this approach an undertaking may deem ‘workers in the value chain’ immaterial overall and thereby avoid reporting on serious human rights concerns such as child labour (Article 24 of the Charter), freedom of association (Article 12 of the Charter), migrant worker abuse and labour exploitation (Articles 5 and 31 of the Charter) or gender-based violence and discrimination (Articles 1 and 21 of the Charter) – all of which may exist within specific suppliers or contexts but remain hidden when viewed from a high level. This may create conflict with international standards, including the UNGPs and the OECD Guidelines, which require businesses to identify and address salient human rights impacts.
  4. Furthermore, the parallel simplification of the CSDDD narrows due diligence obligations in ways that may result in a de facto concentration of attention at Tier 1. Specifically, although the final CSDDD text does not mandate a strict Tier 1 focus, it permits undertakings to prioritise direct partners, apply risk-based scoping without comprehensive mapping and rely on ‘reasonably available information’ rather than deep data requests. In practice, these flexibilities may lead undertakings to conduct more limited due diligence processes overall, which then feed into their ESRS materiality assessments and may create a negative feedback loop. A robust, ongoing due diligence process can significantly simplify and reinforce the materiality assessment, making it more targeted, data-driven, and practical while reducing overall complexity. It facilitates value chain mapping and improves DMA quality [26] Frank Bold, Delivering on Sustainability: Evidence from the First Year of CSRD Implementation, October 2025, p. 41
    . Weaker CSDDD due diligence may lead undertakings to identify fewer material human rights impacts, which in turn reduces ESRS disclosure obligations under the double materiality approach. This undermines the intended complementarity between the two frameworks and may result in reduced human rights reporting – not because impacts have lessened, but because identification processes have been scaled back. The United Nations Children’s Fund (UNICEF) has cautioned that the revised standards must continue to stress the linkage between due diligence and materiality – that is, undertakings should identify impacts by following the due diligence processes set out in frameworks like the UNGPs and the OECD Guidelines, and then determine material topics. When an undertaking conducts thorough human rights due diligence (engaging with stakeholders, assessing risks), it will be less likely to unjustifiably dismiss serious issues as not material [27] United Nations Children’s Fund (UNICEF), The amended ESRS Exposure Drafts: A Summary of UNICEF’s Response‘, UNICEF website, 29 September 2025.
    .
  5. Moreover, the simplified ESRS 1 – may inadvertently further weaken – —requirements for meaningful stakeholder engagement with affected rightsholders. While the original ESRS 1 already lacked an explicit obligation to consult affected stakeholders as part of the materiality assessment, it contained more detailed references to aligning materiality determinations with due diligence processes under the UNGPs and OECD Guidelines, including stakeholder involvement. The simplification process has further diluted these references. Specifically, the simplified ESRS 1 does not appear to mandate or emphasise consultation with potentially affected communities, workers or their representatives as a prerequisite for materiality determinations. This creates a risk that undertakings conduct top-down materiality assessments primarily through internal processes or investor-focused analyses, bypassing the voices of those most directly impacted. This is contrary to UNGP 18, which stresses that the assessment of human rights impacts should involve ‘meaningful consultation with potentially affected groups and other relevant stakeholders’. Without explicit requirements to engage affected stakeholders in identifying and assessing material impacts, undertakings may overlook context-specific harms or dismiss certain groups’ concerns as immaterial, particularly where those impacts do not translate into obvious financial risks. This would be inconsistent not only with the UNGPs but also with the expectations under the OECD Guidelines and the due diligence expectations of the CSDDD (Article 13), which require undertakings to engage with stakeholders in identifying, preventing and addressing adverse impacts across their operations and value chains.

Fair presentation

  1. The simplified ESRS 1 introduces an overarching fair presentation principle, aligning it with international reporting norms such as the ISSB standards. It requires undertakings to faithfully represent their sustainability performance and not mislead or omit material facts [28] EFRAG, ‘Simplified ESRS Factsheets’, EFRAG website, November 2025.
    . This principle requires the application of the qualitative characteristics of information defined in Appendix B of the simplified ESRS 1. Moreover, when the application of ESRS requirements is not sufficient to enable users to understand the undertaking’s material IROs and how they are managed, the undertaking must also disclose entity-specific information [29] EFRAG, Draft ESRS 1: General requirements – November 2025, Brussels, 2025, Section 2.1 as amended.
    .
  2. The fair presentation principle aligns conceptually with available guidance on reporting under international human rights standards. The UNGPs emphasise meaningfuldisclosure of how undertakings address their human rights impacts. In particular, UNGP 21 emphasises form and frequency of information, and calls for communications that are accessible to affected stakeholders and sufficient to evaluate the adequacy of an undertaking’s response to its impacts. By requiring a fair and faithful account of material impacts, ESRS 1 supports the UNGPs approach – namely, that businesses must know their impacts and demonstrate how they address them. It also reinforces the OECD Guidelines expectation that undertakings transparently communicate on due diligence and impacts to facilitate accountability. If robustly applied, this principle also supports the right to information and transparency enshrined in instruments such as Article 11 of the Charter (freedom to receive information) and Article 10 of the ECHR (freedom of expression). These are provisions that also safeguard the public’s ability to scrutinise corporate conduct, as evidenced in Guerra v. Italy in 1998, where the European Court of Human Rights (ECtHR) found that withholding information on industrial risks violated residents’ rights [30] European Court of Human Rights (ECtHR), 19 February 1998, Guerra and others v. Italy, ECLI:CE:ECHR:1998:0219JUD001496789.
    .
  3. By compelling undertakings to report fairly on material human rights issues, the principle can close gaps in disclosure and prevent undertakings from omitting significant human rights impacts under the guise of simplification. Focusing on what is relevant and material rather than a compliance checklist may drive more candid reporting of salient human rights risks (e.g. forced labour in supply chains or community land conflicts), thereby enhancing accountability.
  4. Although the fair presentation principle has the potential to bolster transparency and align ESRS 1 with global human rights reporting norms, its success will depend on rigorous application and on balancing the perspectives of stakeholders with those of enterprises. It should be paired with guidance to ensure that undertakings understand that fairness in sustainability reporting means comprehensiveness and honesty about impacts on people and the environment – consistent with the spirit of UNGP 21.

Relief measures

  1. The simplified ESRS 1 and related standards introduce a series of relief provisions aimed at reducing reporting burdens. These include clauses allowing undertakings to omit or delay disclosures under certain conditions, such as when data gathering would incur ’undue cost or effort’ and during various phase-in periods for new requirements. These provisions allow flexibility to use estimates or industry averages instead of hard data and even the deferral of some value chain reporting. While these measures improve practicality for undertakings, taken together they raise concerns about a cumulative reduction in transparency, particularly regarding human rights and vulnerable groups.
  2. Undue cost or effort exemption. The simplified ESRS have introduced this relief for all the elements of reporting, from identifying material IROs to calculating metrics, in line with IFRS S1 and S2. In addition, the relief is applicable to metrics both in an undertaking’s own operations and in upstream and downstream value chains. This relief does not exempt an undertaking from providing a disclosure, but it allows disclosure of a calculation that includes only a partial scope, when reliable direct or estimated data are not available. When using this relief, the undertaking must disclose actions it will take to improve the coverage of its calculation in future periods. This transparency is expected to provide sufficient incentive to improve data quality and achieve a more complete scope in the calculation of metrics [31] EFRAG, Draft ESRS 1: General requirements – November 2025, Brussels, 2025, Section 7.4 as amended.
    .
  3. This general relief appears across multiple standards and is not time-bound, meaning an undertaking could potentially invoke it year after year for the same disclosure. In the absence of clear guardrails, stakeholders warn [32] Shift, Shift statement on the Revised European Sustainability Reporting Standards (ESRS)‘Shift statement on the revised European sustainability reporting standards (ESRS)’, Shift website, 3 December 2025.
    that the exemption could be misused and could become a de facto loophole for chronic under-reporting, with essential information on high-risk supply chains or community impacts never surfacing. From a fundamental rights perspective, such opacity may undermine accountability and impede the ability of affected rightsholders and oversight actors to detect harm or seek remedy, in breach of Article 47 of the Charter.
  4. Value chain data flexibility. A major simplification is the elimination of the former preference for direct supplier data. Undertakings are now explicitly permitted to use estimates, proxies or industry average data for value chain information [33] EFRAG, ‘EFRAG provides its technical advice on draft simplified ESRS to the European Commission’, EFRAG website, 3 December 2025.
    . This reduces pressure to obtain precise data from suppliers, addressing corporate complaints about the data collection burden. Undertakings may draw on publicly available sources or industry benchmarks in lieu of obtaining metrics from each supplier, provided they disclose their estimation methodology.
  5. Meanwhile, the Omnibus I package significantly narrows the personal and material scope of the CSRD: only undertakings with over 1 000 employees and a turnover of more than EUR 450 million will be required to report. Listed small and medium-sized enterprises (SMEs) are to be exempt entirely. In practice, this means that thousands of medium-sized companies will no longer fall under the sustainability reporting regime. Many of these undertakings have significant regional or global operations where human rights issues (e.g. in mid-tier suppliers or local labour practices) can arise. Furthermore, a ‘value chain information cap’ has been introduced as part of the CSRD post Omnibus I. This cap limits how much sustainability data that in-scope undertakings can demand from smaller value chain partners. In practice, SME suppliers (below certain size thresholds) gain a statutory right to refuse or limit data provision beyond what is covered by simplified voluntary SME standards.
  6. These changes ease administrative burdens but they may limit the granularity and reliability of value chain data available for risk analysis [34] EFRAG, Outreach Summary, Final Results, 9 October 2025.
    . If an SME supplier declines to provide emissions data or information on labour conditions, the focal company must rely on sector averages or generic estimates for that supplier’s segment. While this avoids overburdening the SME, it means the reported picture of the supply chain is based on assumptions. Serious abuses such as child labour or land grabs often occur in specific localities or sub-tiers; these issues may remain undocumented if the undertaking has access to only high-level information. Together, the value chain information cap and ESRS reliefs mark a shift towards a more flexible, issuer-friendly reporting regime. Yet, there is a risk that human rights issues go unreported or even undetected, running counter to the aims of sustainability reporting [35] European Network of National Human Rights Institutions (ENNHRI), ENNHRI statement on the Omnibus I proposal to inform trilogue negotiations, Belgium, 2025.
    . Thus, while this relief may seem justifiable in isolation, taken together with other amendments introduced by Omnibus I it poses a systemic risk of under-reporting if not accompanied by clear guidance and safeguards.

Interoperability

  1. The draft simplified ESRS 1 has been adopted with a strong focus on interoperability with global sustainability standards, particularly the ISSB’s IFRS S1 and S2 and the GRI Standards. Wherever possible, the revision employs the same wording as IFRS S1 (‘General Requirements for Disclosure of Sustainability-related Financial Information’) and IFRS S2 (‘Climate-related Disclosures’) for provisions common to both frameworks, including in ESRS 1 (General requirements), ESRS 2 (General disclosures) and ESRS E1 (climate change). Although the revised ESRS retain their double materiality perspective (in contrast to the ISSB’s financial materiality focus), alignment on general requirements has been enhanced by explicitly embedding a fair presentation framework, mirroring IFRS S1 and S2. The concept of materiality has also been reinforced.

Conclusions

  1. The draft simplified ESRS 1 reflects a deliberate recalibration of the general requirements around three organising principles: double materiality as the gateway to reporting, an overarching fair presentation principle, and increased flexibility in structure and evidence. They are intended to streamline reporting, improve clarity and enhance interoperability with the ISSB/IFRSs baseline while preserving the breadth of the EU framework.
  2. The reaffirmation of double materiality remains the most significant safeguard for human rights transparency within the simplified ESRS 1. By maintaining impact materiality alongside financial materiality, the framework preserves the requirement to disclose significant impacts on people and the environment, operationalising a risk-based approach consistent with international standards. However, there are concerns about how double materiality may be operationalised under the simplified ESRS 1, particularly due to the deletion of the blanket requirement to consider all ESRS topics and the explicit permission to apply a ‘top-down’ topical approach. This flexibility, while potentially reducing burdens, could allow undertakings to deem broad themes immaterial and thereby avoid disclosure of context-specific harms that are obscured at the aggregate level. Furthermore, by diluting the requirements for meaningful stakeholder engagement, there is a risk that undertakings conduct materiality assessments as top-down, internally driven exercises, bypassing the voices of those most directly affected.
  3. These amendments raise the risk that due diligence becomes a ‘compliance mapping’ exercise rather than a genuine, continuous assessment of the risk of harm [36] ENNHRI, ENNHRI statement on the Omnibus I proposal to inform trilogue negotiations, Belgium, 2025.
    . Materiality determinations – especially where a topical screening approach is used – should be explicitly anchored in robust human rights due diligence processes, so that ‘top-down’ judgements do not substitute for the identification of salient impacts. In addition, undertakings should be expected to demonstrate – through their materiality assessments and fair presentation logic –that reliance on Tier 1 visibility does not become a de facto ceiling for identifying and reporting severe impacts beyond direct suppliers, particularly for risks that are structurally more likely to arise deeper in the value chain. Furthermore, the application of severity in impact materiality (scale, scope and irremediable character) should be reinforced in practice as a safeguard against superficial non-materiality conclusions for grave harms, ensuring that the most serious impacts are not screened out on the basis of aggregation or perceived business irrelevance.
  4. The introduction of an overarching fair presentationprinciple has the potential to strengthen human rights reporting by requiring a true, balanced and comprehensive depiction of material IROs, moving beyond tick-box compliance and, where necessary, compelling entity-specific disclosures to avoid misleading omissions.
  5. Relief measures, particularly the ‘undue cost or effort’ exemption, may reduce transparency in contexts where rightsholders most need visibility. Without strict guardrails or time limits, the ‘undue cost or effort’ exemption could be invoked repeatedly for the same disclosures, enabling chronic and persistent under-reporting, while partial-scope calculations may not provide sufficient insight into high-risk areas.
  6. The increased flexibility with regard to value chain information can weaken the granularity and reliability of information available for human rights risk analysis, since severe abuses are often concentrated in sub-tiers and may therefore not be detectable in high-level averages. This must be read in combination with the changes in personal and material scope introduced by Omnibus I, and the new ’value chain information cap’. Furthermore, where estimates or proxies are used, undertakings should be expected to disclose sufficient methodological detail to allow users to understand the basis, limitations and uncertainty of the reported picture, including how estimation choices may affect the visibility of salient human rights risks. In parallel, the overall risk should be framed and treated as cumulative: simplification and scope reductions may be administratively defensible in isolation, but their combined effect on transparency for high-risk value chains should be monitored and addressed through disciplined application of double materiality, robust fair presentation and appropriate use of entity-specific disclosures to ensure that salient human rights harms are not rendered invisible by structural flexibility.

FRA Opinion 1

In the context of adopting ‘ESRS 1 – General Requirements’ as delegated act, the European Commission should have due regard to the following considerations.

  1. Double materiality remains essential for human rights accountability. The European Commission should, at a minimum, maintain the proposal of EFRAG. Further changes will upset the balance between feasibility for companies and usefulness for investors and other stakeholders. The revised ESRS should retain double materiality as the reporting gateway and preserve the severity lens for impact materiality (scale, scope, irremediability). The new ”top-down” approach to the DMA comes with a risk of excluding impact material issues on the basis of company internal logics. To avoid this, the approach should remain anchored in the materiality criteria and the relevance of HRDD as an input for DMA should be preserved or reinforced. Stakeholder engagement in materiality assessments must involve meaningful consultation with affected rightsholders (UNGP 18; CSDDD, Article 13), preventing default to internal or investor-centric processes.
  2. The fair presentation principle can enhance transparency and align ESRS 1 with related UNGP 21 companies’ communication responsibilities. The European Commission could consider requesting EFRAG to issue interpretative guidance with practical examples to ensure the comprehensiveness and accuracy of reporting of impacts on people and the environment and to prevent subjective justifications resulting in disproportionately light disclosures.
  3. The delegated act should include minimum safeguards against the potential misuse of the reliefs (especially ‘undue cost or effort’), which create a risk of under-reporting without controls. It could, for example, require a time-bound application with progress expectations, meaningful justifications for omissions, and materiality overrides for severe human rights impacts.
  4. Value chain reliefs (estimation/proxies, information caps) risks undercutting the materiality lens by creating visibility gaps for serious human rights abuses. The delegated act should provide for an obligation to disclose sufficient and transparent methodological detail (basis, sources, assumptions, limitations) while applying double materiality and covering the value chain impacts regardless of data gaps. The issue should be treated as cumulative in implementation: that is, ensure that the combination of flexibility and reliefs does not, in practice, reduce the ability to identify and report severe harms beyond direct (Tier 1) relationships.


2.2. ESRS 2 – General Disclosures


  1. The simplified ESRS 2, ‘General Disclosures’, introduces substantial changes from its 2023 version. One of the most consequential changes is the clarification that undertakings may choose to report either at the level of IROs or at the broader topic level, depending on what best reflects the nature of the IROs and how they are managed.
  2. The Basis for Preparation (BP-1) and the accompanying phasing-in disclosure (BP-2) have been substantially simplified. BP-1 now reflects a simplified ‘comply or ‘explain’ model, requiring undertakings to declare compliance with ESRS 1 and provide deviations only where applicable.
  3. Governance disclosures (GOV) also underwent structural consolidation. The five original requirements were reduced to four, with GOV-1 absorbing elements of GOV-2 and GOV-5. GOV-3, relating to due diligence, remains mandatory and is aligned with the principal adverse impact (PAI) indicators of the Sustainable Finance Disclosure Regulation (SFDR), although simplified in form.
  4. In terms of strategy and business model (SBM) disclosures, SBM-1 was reduced and clarified. SBM-2 now focuses solely on key stakeholders, removing prior requirements to disclose strategy amendments based on stakeholder engagement [37] EFRAG, Draft simplified ESRS 2 para 21(44 amended) and para 22(45) amended. 
    . SBM-3 has been narrowed to address only how material IROs interact with the undertaking’s strategy and business model.
  5. The IRO section was also revised. IRO-1 saw the deletion or aggregation of several requirements detailing the double materiality assessment process, including how it integrates into the broader risk management process.
  6. Across the General Disclosure Requirements (GDRs) for policies (GDR-P), actions (GDR-A), targets (GDR-T) and metrics (GDR-M), EFRAG introduced additional flexibilities. The terminology has been revised to allow disclosure at topic, subtopic or cross-referenced levels.

Human rights impact and legal analysis

Governance disclosures

  1. The simplified ESRS 2 introduces substantial simplification and restructuring of a significant portion of the standard. However, the reduction in detail raises concerns about transparency and accountability. By merging and abbreviating the governance requirements, the draft could weaken the assessment of human rights risks.
  2. Notably, the explicit obligation to explain ‘whether, by whom and how frequently’ boards are informed about materialimpacts has been removed. In practical terms, this means that stakeholders (including affected workers or communities) will have less assurance that boards are systematically briefed on environmental and human rights issues. The 2023 ESRS 2 made information flows transparent, whereas the new standard relies on less explicit, narrative reporting, thus, departing form earlier good practice. In addition, removing this requirement means that boards are no longer required to receive direct information on the views and interests of affected stakeholders (as distinct from general sustainability impacts), which is a missed opportunity to strengthen governance accountability for human rights. Boards may now rely on aggregated sustainability reports or risk dashboards without hearing directly from, or about, affected communities, workers or their representatives, weakening the link between those experiencing impacts and those exercising decision-making authority, and reducing the likelihood that issues raised by affected stakeholders are prioritised [38] See also Frank Bold, ‘Delivering on Sustainability: Evidence from the First Year of CSRD Implementation’, October 2025, p.34
    .

Strategy, impacts, risks and opportunities, and engagement

  1. In relation to strategy and business model disclosures, the revised SBM-2 now focuses solely on ‘key stakeholders’, (a newly introduced term which is not defined) and removes the prior requirement to disclose strategy or business model changes resulting from stakeholder engagement. [39]  EFRAG (2025), Draft Simplified ESRS 2 para 21(44 amended) and para 22(45) amended.
    Under the previous ESRS 2, paragraphs 43–45 required undertakings to disclose how stakeholders’ interests and views were taken into account in the strategy and business model; how these views informed strategic choices; and how the outcomes of stakeholder engagement had been reflected. In the revised text, these prescriptive disclosures have been removed. The only remaining reference is framed as an objective of SBM-2 (paragraph 21 (44 amended)), indicating that disclosure should show how stakeholder input influenced strategy. However, this formulation does not enshrine an obligation, thereby weakening enforceability and accountability. This shift significantly impacts human rights, because under the original ESRS 2 SBM-2, undertakings had to explain not only how stakeholder interests informed strategy, but also, where relevant, what concrete changes were made (including timelines and next steps), which is especially important for affected stakeholders whose rights could be impacted. The shift also weakens the connection between rightsholder input and corporate responsiveness [40] EFRAG, Amended ESRS Exposure Draft – July 2025 - Basis for Conclusions – ESRS 2, page 43.
    .
  2. Regarding revised IRO-related provisions and information on stakeholderengagement [41] EFRAG (2025), Draft simplified ESRS 2 para 34(52 amended) and para 35(53 amended).
    , these need to be read together with ESRS 1, since both standards refer to stakeholder engagement in the materiality process but stop short of giving prescriptive guidance on when and how affected stakeholders (as opposed to financial stakeholders) must be consulted. The simplified ESRS 2 may exacerbate this gap by reducing narrative detail on how stakeholder input informed the identification and assessment of IROs, with no clear requirements to engage affected stakeholders – especially those without existing relationships with the company but who may be affected by its value chain (e.g. indigenous communities affected by land use, informal workers in supply chains or migrants facing labour exploitation). The deletion of more detailed process requirements in IRO-1 may further reduce transparency about whether and how affected stakeholders were consulted, making it harderto assess the credibility of materiality determinations [42] Simon Taylor, (2023), Unlocking the power of stakeholders in the ESRS Double Materiality Assessment, (27 April, 2023).
    .
  3. While new paragraph 35(c) in simplified ESRS 2 IRO-1 helpfully encourages undertakings to leverage existing stakeholder engagement from due diligence processes, the undertakings could be also required to disclose a summarised description of their stakeholder engagement, including information about the key stakeholders with which their engaged, with reference to typical categories of affected stakeholders defined in ESRS 1 General Requirements, AR 21, and the purpose of the engagement. This would be in line with In line with GRI 2-29-a-i. [43] GRI, Annex. GRI response to public consultation on the amended ESRS exposure drafts, p. 7, 24 September 2025

General Disclosure Requirements

  1. A critical revision to the December 2025 draft of ESRS 2 concerns the removal of the mandatory data point that required undertakings to specify whether they are involved with material impacts through their own activities or through their business relationships, and to describe the nature of these activities or relationships (former paragraph 48(c)(iv) of the 2023 version [44] Paragraph 48(c)(iv) of the 2023 ESRS 2 read: ‘whether the undertaking is involved with the material impacts through its activities or because of its business relationships, describing the nature of the activities or business relationships concerned;’
    . This deletion affects a core due-diligence accountability metric (cause/contribute/directly linked) and has raised concern among stakeholders, including the GRI [45] See GRI’s feedback on the amended ESRS exposure drafts and proposed wording suggestions, page 4, point 5.
    , which noted that the replacement language in paragraph 37(a) – requiring disclosure of ‘how and where impacts, risks and opportunities are connected to its own operations and its upstream and downstream value chain’ – is significantly more general and may result in more vague, less actionable reporting. From a human rights perspective, this change weakens the accountability mechanism at the heart of due diligence and creates a risk that undertakings may obscure their connection to salient harms – such as forced labour or environmental degradation in supply chains – by providing generalised disclosures, thereby undermining interoperability with international frameworks.
  2. The simplified ESRS 2 also raises a critical concern regarding the removal of a stand-alone mandatory data point that previously required undertakings to disclose the key actions taken to provide for, cooperate in or support the provision of remedy for those harmed by actual material impacts. This data point, originally captured in paragraph 68(d)78, ensured visibility of remedial efforts and enabled stakeholders to easily assess whether undertakings addressed the consequences of their adverse impacts. Its deletion, and the subsequent integration of references to remediation into a broader provision alongside prevention and mitigation measures (paragraph 45 [46] Paragraph 45 of the draft simplified ESRS 2 read: ‘When the undertaking implements key actions to manage material impacts, risks and opportunities, it shall disclose: (a) a description of the key actions taken in the reporting year and those planned for the future, including their scope and timeframe.’
    , introduces ambiguity about whether remedial actions remain an explicit and mandatory DR. This integration risks undermining the clarity and prominence of remediation within the sustainability reporting framework80. It also risks undermining harmonisation with the CSRD. Specifically, Article 19(a)2(f)(iii) of the CSRD requires undertakings to describe actions taken to prevent, mitigate, remediate or bring an end to actual or potential adverse impacts, along with the results achieved. Given the central role of prevention, mitigation and remediation actions in the CSRD, it would be beneficial if these actions were explicitly required in GDR-A for the avoidance of doubt and to ensure that they are not overlooked for any material impact, including entity-specific impacts.
  3. From a human rights perspective, this development is problematic. Remediation is one of the three pillars of the UNGPs framework, which calls on businesses to remediate harms linked to their activities, and the states to ensure that victims of corporate human rights abuses can access justice. In particular, under UNGP 22 and Article 47 of the Charter, undertakings are expected to provide for or cooperate in remediation when they identify that they have caused or contributed to adverse impacts: they ‘should provide for or cooperate in their remediation through legitimate processes’. Similarly, the OECD Guidelines call for transparent disclosure of the steps taken to remediate harms (Chapter III ‘Disclosure’). Reporting frameworks that obscure or omit clear references to remedial actions fail to support these obligations. Furthermore, GRI Standard 3–3(d) explicitly requires companies to report on how they address actual negative impacts, including the actions taken to remediate them. The deletion of a clear, stand-alone reference to remedy therefore results in a misalignment between ESRS 2 and internationally recognised standards, in particular UNGPs (Principles 22-25 on remediation) and GRI 3-3(d) (explicit actions to remediate actual negative impacts).
  4. Finally, the revised standards relocate human rights policy disclosures from the individual social standards (S1–S4) to a single, cross-cutting item in ESRS 2 (GDR-P). While this may reduce duplication and improve comparability, it risks reframing human rights as a generic theme. In practice, this may result in undertakings producing a single, high-level policy statement that does not distinguish between the specific commitments, governance arrangements and due diligence processes appropriate to different rightsholder groups – own workforce, value chain workers, affected communities and consumers. The result is reduced granularity and specificity, making it harder to assess whether policies are adequately tailored to salient risks and particular rightsholders.

Conclusions

  1. The simplified ESRS 2 delivers substantial simplification and restructuring of the standard, but the reduction in detail carries tangible risks for transparency and human rights accountability.
  2. First, a material concern arises from the merging and abbreviation of governance requirements. The simplified ESRS 2 removes the explicit obligation to explain ‘whether, by whom and how frequently’ boards are informed about material impacts. In practical terms, this deprives stakeholders, including affected workers and communities, of clear assurance that boards are systematically briefed on environmental and human rights issues.The 2023 ESRS strengthened accountability by making internal information flows transparent; by contrast, the removal of this data point in the simplified ESRS 2 risks obscuring whether governance structures are genuinely engaged with material impacts. ESRS 2 should reinstate a clear, mandatory disclosure expectation regarding board-level information flows on material impacts, including the mechanisms by which boards are kept informed and the frequency of that engagement. This is not a formality: it is a necessary precondition for credible oversight of human rights risks and for stakeholder confidence that governance arrangements are more than nominal.
  3. Furthermore, the ESRS 2 should reinstate an explicit, mandatory governance disclosure requirement, obliging undertakings to explain the channels through which perspectives from affected communities, workers or their representatives reach the administrative, management and supervisory bodies - and how this information informs decision-making on material impacts and related actions. This would restore a direct accountability nexus between those experiencing human rights impacts and decision-makers, reducing the risk that stakeholder concerns are diluted into generic dashboards and strengthening the likelihood that boards identify, prioritise and respond to issues raised by affected stakeholders.
  4. The deletion of the mandatory data point requiring undertakings to specify whether they are involved with material impacts through their own activities or through business relationships is also significant. The draft introduces more general language in paragraph 37(a), requiring disclosure of ‘how and where impacts, risks and opportunities are connected’ to operations and the value chain, which is less precise and risks producing more vague, less actionable reporting. From a human rights perspective, this change dilutes an accountability mechanism that sits at the heart of due diligence. The specificity of involvement is essential to understanding whether an undertaking is causing, contributing to or directly linked to harm through business relationships. The draft should be amended to restore explicit disclosure requirements that require undertakings to describe the nature of their involvement in material impacts, distinguishing between impacts arising from their own activities and those connected through business relationships, and describing the relevant activities or relationships with sufficient specificity to support scrutiny. This would also mitigate the risk that the deletion undermines interoperability with internationally recognised approaches that require clarity on how an undertaking is involved with an impact. 
  5. The narrowing of SBM-2 to ‘key stakeholders’, together with the deletion of the requirement to disclose whether and how stakeholder engagement resulted in strategy or business model amendments, weakens accountability for human rights violations. ESRS 2 should reinstate a clear disclosure expectation within SBM-2 requiring undertakings to explain, where applicable, what specific strategy or business model adjustments were made in response to engagement with affected stakeholders, which is central to credible human rights engagement and adaptive management.
  6. The revised IRO disclosures and stakeholder engagement expectations must be read alongside ESRS 1, yet both standards remain non-prescriptive on when and how affected stakeholders (as distinct from financial stakeholders) should be consulted in the materiality process. The simplification of ESRS 2 – particularly the reduced narrative detail and the deletion of more explicit process elements in IRO-1 – risks enabling materiality assessments driven by desktop research, internal workshops or investor / business partner input, potentially missing context-specific human rights impacts. Accordingly, ESRS 1 and 2 should require – or at a minimum clearly guide – engagement with affected stakeholders where human rights impacts are likely, including those without existing relationships but potentially impacted through the value chain. In addition, IRO-1 should require sufficiently specific disclosure of whether and how such engagement informed IRO identification and assessment so that users can judge the credibility of materiality determinations.
  7. A further concern relates to the removal of a stand-alone mandatory data point that previously required disclosure of the key actions taken to provide for, cooperate in or support remedy for those harmed by actual material impacts. The deletion of this discrete data point and the integration of remediation references into a broader provision alongside prevention and mitigation creates ambiguity as to whether remedial actions are clearly mandatory. Critically, it also reduces the prominence of remedy within the reporting architecture, generating misalignment with international frameworks, of which remedy is a core pillar [47] see also UNGPs Principle 22; Article 47 of the EU Charter, OECD Chapter III, Disclosure.
    . The draft ESRS 2 should be amended to reintroduce a standalone mandatory data point requiring disclosure of the key actions taken to provide for and support remediation for those harmed by actual material impacts. If a standalone data point is not reinstated, paragraph 37 could be revised to include an explicit sub-point on remedial actions, ensuring remedy is not subordinated within a broader narrative that may, in practice, prioritise prevention and mitigation and leave remediation under-specified. 
  8. Finally, relocating human-rights policy disclosures from the topic-specific social standards (S1–S4) into a single cross-cutting ESRS 2 item (GDR-P) may reduce duplication and aid comparability, but it risks flattening human rights into a generic theme. Accordingly, ESRS 2 should require that the cross-cutting human-rights policy disclosure remains explicitly disaggregated by rights-holder group, so undertakings set out group-specific commitments and the associated governance and due-diligence approaches, rather than relying on a single undifferentiated statement. 

FRA Opinion 2

In the context of adopting ‘ESRS 2 – General Disclosures’ as delegated act, the European Commission should have due regard to the following considerations.

  1. Governance simplification reduces accountability for board-level oversight of human rights risks. The delegated act should reinstate the removed requirement (paragraphs 24–26 of GOV-2 in the 2023 ESRS 2), which mandated undertakings to explain ‘whether, by whom and how frequently’ boards are informed about material impacts. This would restore transparent information flows and credible oversight.
  2. The removal of paragraph 48(c)(iv) from the 2023 ESRS 2 weakens due diligence transparency, enables vague reporting and reduces comparability and precision. The delegated act should reinstate the requirement (in IRO 2 37) for undertakings to specify whether impacts arise through their own activities or business relationships and to describe the nature of those activities/relationships, rather than relying solely on the more general replacement wording in paragraph 37(a) (‘how and where impacts, risks and opportunities are connected to its own operations and its upstream and downstream value chain’).
  3. SBM-2 no longer ensures accountability for responsiveness to stakeholder engagement in strategy and business model decisions. The delegated act should reinstate the prescriptive ‘shall disclose’ requirements previously contained in paragraphs 43–45 (how stakeholder views were taken into account, how they informed strategic choices and how stakeholder engagement outcomes had been reflected). This includes disclosure – where relevant – of concrete amendments, timelines and next steps for affected stakeholders (own workforce, value chain workers, affected communities and consumers).
  4. IRO-1 simplification compounds the gap in ESRS 1 and 2 on affected stakeholder consultation, undermining the credibility of materiality/IRO determinations. While new paragraph 35(c) in simplified ESRS 2 IRO-1 helpfully encourages undertakings to leverage existing stakeholder engagement from due diligence processes, the delegated act could also restore certain process transparency in IRO-1 by requiring specific disclosure of whether and how affected stakeholders were consulted and how their input informed IRO identification and assessment. ESRS 1 and 2 should require, or at a minimum clearly guide, engagement with affected stakeholders where human rights impacts are likely, including those without existing relationships but potentially impacted through the value chain.
  5. Removing the stand-alone remedy data point in paragraph 68(d) obscures remediation efforts and risks misalignment with CSRD and international standards. The delegated act should reintroduce the stand-alone mandatory data point on key actions to provide for / cooperate in / support remedy for those harmed by actual material impacts. If this data point is not reinstated, paragraph 37 should be revised to include an explicit subpoint on remedial actions, and GDR-A should explicitly require prevention, mitigation and remediation actions for all material impacts to avoid ambiguity and support CSRD Article 19(a)2(f)(iii).
  6. Relocating human rights policy disclosures to a single, cross-cutting item (GDR-P) risks reducing human rights to generic statements. The delegated act should require GDR-P disclosures to remain explicitly disaggregated by rightsholder group (own workforce, value chain workers, affected communities and consumers), setting out group-specific commitments and the associated governance and due diligence approaches, rather than a single, undifferentiated policy statement.
1. Introduction3. Social Standards
Related
Four business professionals in a meeting beneath a world map made of sustainability and energy-related words in blue tones.
Rawpixel.com / adobestock.com
Report / Paper / Summary
Human rights due diligence
Equality, non-discrimination and racism
Justice, victims’ rights and judicial cooperation
Environmental and social sustainability
22
October
2025

A Human Rights Approach to Due Diligence: Reflections on key principles

This publication discusses how businesses can meet their human rights and environmental responsibilities. It focuses on key elements of mandatory human rights due diligence and presents reflections on principles from international law and EU law. The paper explains why risk-based human rights due diligence is needed and how it should be implemented. It also highlights the importance of stakeholder engagement, access to remedies, and oversight. It aims to inform EU policymakers and stakeholders about ways to effectively promote responsible business conduct and to ensure adequate protection of rightsholders.
Read news item
Industry smoking chimneys with forest overlay.
Report / Paper / Summary
Consumer protection
Justice, victims’ rights and judicial cooperation
Environmental and social sustainability
7
March
2024

Enforcing consumer rights to combat greenwashing

Tackling greenwashing is an issue where human rights, consumer rights and climate goals align. Companies use greenwashing to convince people to buy products that are not always as environmentally friendly as they claim to be. They mislead consumers and harm the environment. This report shows how a human rights approach can combat greenwashing. It is based on consultations with experts in 10 Member States. The report identifies gaps in existing laws and enforcement. It includes case studies of consumers seeking remedies for misleading environmental claims.
Read news item
© Freshideas / Adobestock
Report / Paper / Summary
Business and human rights
Justice, victims’ rights and judicial cooperation
Environmental and social sustainability
Business and human rights
6
October
2020

Business and human rights – access to remedy

Business activity affects not just customers, employees, and contractors along supply chains, but often entire communities and the environment. This makes it vital that every business complies with human rights. This comparative report looks at the realities victims face when they seek redress for business-related human rights abuses. It presents the findings of fieldwork research on the views of professionals regarding the different ways people can pursue complaints. The findings highlight that obstacles to achieving justice are often multi-layered.
Read news item
Om FRA

Læs mere om agenturet og dets arbejde her.

  • Om FRA
  • EU’s Charter om Grundlæggende Rettigheder
  • Hvor du kan få hjælp
  • Nyt
  • Abonnér på opdateringer
Kontakt
Address
European Union Agency for Fundamental Rights
Schwarzenbergplatz 11
A-1040 Vienna, Austria
E-mail
Kontakt os
Newsletter
Abonnér på opdateringer
  • Facebook
  • Twitter
  • LinkedIn
  • YouTube
  • Newsletter
  • E-mail
  • RSS

© European Union Agency for Fundamental Rights, 2007-2026

  • About this website
  • Legal notice
  • Cookies
  • Data Protection
  • Accessibility