Following the publication of the Omnibus proposals and in line with the European Commissioner Albuquerque’s request, the EFRAG Sustainability Reporting Board (SRB) has approved today its comprehensive and fast-tracked work plan to deliver its technical advice by 31 October 2025 for the revision and simplification of the European Sustainability Reporting Standards (ESRS).

EFRAG’s approach will build on the experience of first-wave companies that implemented ESRS for their 2024 financial year.

📅 Timeline and steps

⭕ April to mid-May 2025

Establishing a vision on actionable levers for substantial simplification (to be confirmed following the stakeholders’ feedback)

Gathering evidence from stakeholders, analysis of the issued reports and other sources – the public call for input is open until Tuesday 6 May

⭕ Second half of May to July 2025

Drafting and approving the Exposure Drafts amending ESRS

⭕ August and September 2025

Publishing the Exposure Drafts, receiving and analysing feedback (including via public consultation) from stakeholders

⭕ October 2025

Finalising and delivering the technical advice to the EC

The work plan is based on the Omnibus proposals as tabled by the EC and does not consider the consequences of changes that may stem from the legislative process. Should changes be made, the timetable and work plan might need to take account of them for the delivery of an appropriate technical advice.

EFRAG has initially identified actionable levers that will be further specified following the evidence gathering phase:

🌿 Revising the presentation and architecture, including the articulation of cross cutting and topical provisions.

🌿 Addressing the most challenging provisions, including the clarification of the application of the materiality principle, to ensure that only material information is required to be reported.

🌿 Evaluating general burden reduction reliefs for ESRS, to reduce the compliance efforts horizontally across disclosures. This may include reliefs for (i) reporting information about acquired businesses and disposals, (ii) certain confidential and possibly business sensitive information and (iii) metrics affected by estimation uncertainty and lack of data quality, including through a broader use of the “undue cost and effort” principle.

🌿 Substantially reducing the number of required datapoints (“shall”), and considering the relevance of disclosure requirements, if need be, with a (not exclusive) focus on narrative disclosures. This critical part of the burden reduction effort will include deletions and transfer of datapoints from a “mandatory” status to a “voluntary” status (“shall” transferred to “may” or to guidance/guidelines or to illustrative examples/educational material). The reduction of datapoints shall be considered from a burden reduction angle as well as from a numerical angle.

Read more here: https://www.efrag.org/sites/default/files/media/document/2025-04/EFRAG%20ESRS%20Revision%20Work%20Plan%20and%20Timeline%20submitted%20to%20the%20EC_25042025.pdf

The recognition of gender diversity, inclusion and pay equity as important dimensions of corporate sustainability performance is not only a matter of fairness, but also of economic analysis confirming that it drives growth, innovation and competitive advantage.

These indicators are also relevant to the UN Sustainable Development Goal 5 “Gender equality” and 10 “Reduced inequalities”.

They focus on measuring vertical inequality associated with the distribution of income, wealth and other economic resources among individuals, and horizontal inequality between social groups, differentiated, for example, by race, ethnicity and gender.

Traditional social relations and cultural norms may undermine gender equality within organizations, and there are increasing pressures not only to disclose but also to explain and address differences related to gender imbalance and pay gaps.

As regards gender diversity, there can be different ways of thinking about targets. One would be to assume that the appropriate target for gender balance should be determined by demographic balance, that is, 50-50.

Another would be to factor in persistent core issues – such as segmented labour markets, cultural bias and the gender division of labour associated with caregiving – underpinning gender inequality from a structural perspective.

Women’s paid work is often concentrated in low-paid, low-quality jobs, advancement and career structures remain constrained by cultural norms and bias, and they tend to spend around 2.5 times more time on unpaid care and domestic work than men (UN Women 2018).

Despite progress made over the years in achieving gender equality, many challenges remain to women’s equal enjoyment of human rights in all spheres. Women continue to experience multiple forms of discrimination, disadvantage and exclusion, and they are underrepresented in decision-making positions.

Among high-income countries, the widening of the gender pay gap is particularly evident at the upper end of the wage distribution, while in low- and middle-income countries this is more apparent at the low end of the distribution (ILO 2018).

The right to equal pay for equal work is one of the EU’s founding principles enshrined in Article 157 of the Treaty on the Functioning of the European Union. However, the practical implementation and enforcement of this principle remains a challenge. In 2021, according to the EU Commission the gender pay gap was still 12,7% in the EU, varying from 0.7 % in Luxembourg to 22.3% in Latvia.

In 2022, as part of the EU Gender Equality Strategy 2020-2025, the European Parliament formally adopted the new EU law on gender balance on corporate boards. By 2026, companies will need to have 40% of the underrepresented sex among non-executive directors or 33% among all directors by 30 June 2026.

This figure is situated between the minimum of the ‘critical mass’ of 30%, which has been found necessary in order to have a sustainable impact on board performance and full gender parity, 50%. (European Commission, 2012)

So, targets within the range of 30 to 50%, and the specific goal of 40%, seem to constitute current benchmarks for gender diversity.

With regard to the gender pay gap, there seems to be considerable agreement that parity is the ultimate goal. A possible benchmark could be the performance of companies or countries identified as leaders or top performers.

According to the OECD (2018), top-performing countries are those with gender pay gaps of less than 10%. The Equileap scorecard method, for example, which is used for identifying and ranking the best performers in terms of gender equality, singles out companies with a mean gender pay gap of 3% or less (Equileap 2018). Interestingly enough, mandatory reporting in Great Britain has revealed that 24% of employers have no gender pay gap, or one that favours women. (*Report published by the UN Research Institute for Social Development – UNRISD)

Parity is the obvious normative goal for the gender pay gap. And one could conclude that should the disparity exceed 3% it’s time to get really worried.

It’s also important not to mask the scale of disadvantage in one category. Data disaggregated by multiple hierarchical or occupational categories can reveal where disparities are located.

Gender equality in the workplace, and more generally, has since gained greater global attention due to the SDGs and specific SDG targets as well as new UN guidance published in 2019 on Gender Dimensions of the Guiding Principles on Business and Human Rights (supported by the Government of Sweden). You can access the document here: https://www.ohchr.org/sites/default/files/Documents/Issues/Business/BookletGenderDimensionsGuidingPrinciples.pdf

(*) Report: Sustainability Accounting. What can and should corporations be doing? Research and writing by Peter Utting with Kelly O’Neill. The United Nations Research Institute for Social Development (UNRISD)