TheRockGroup’s perspective on the simplification of CSRD reporting standards
As sustainability reporting continues to evolve, it’s essential that the frameworks guiding it remain both practical and effective. In response to the Omnibus proposal aimed at simplifying the CSRD, TheRockGroup submitted feedback highlighting key areas where clarification and refinement are needed. In this blog, we share CSRD simplification recommendations from TheRockGroup’s experts, grounded in practice and aimed at improving business relevance and usability.
We support the ambition to simplify the standards, but believe that simplification should not come at the expense of clarity, consistency, or usefulness. Our recommendations focus on making double materiality assessments (DMA) and other core processes more aligned with business realities while reducing unnecessary complexity. Thereby, CSRD can strengthen sustainable performance instead of being an administrative burden.
In our feedback to EFRAG, we presented three key concerns based on our experience in the field. These CSRD simplification recommendations reflect practical challenges we see companies face when navigating the current ESRS framework.
1. Clarity around the expected DMA methodology
The ESRS emphasise that companies are free to determine their own DMA process. The implementation guidance presents one possible process but explicitly states that it is non-prescriptive.
However, in practice, the freedom is limited. The reporting requirement leads to an expected approach (meeting criteria such as impact scale, scope, irremediability, time horizons, thresholds, actual/potential, likelihood, etc.). Companies are therefore compelled to follow certain implicitly prescribed methodologies. This is often driven by a desire to “tick all boxes” and meet anticipated audit expectations. As a result, the DMA becomes overly bureaucratic, time-consuming, and disconnected from the actual business reality.
Our CSRD Simplification Recommendation: Clarify the expectations.
Either:
- allow for real methodological freedom and adapt the reporting requirements accordingly,
- or provide a more clearly defined, consistent methodology that companies can follow confidently.
In its current form, the ESRS risk creating a situation where companies either overcomplicate the DMA unnecessarily or fail to meet unclear expectations. Greater alignment between the principles of flexibility and the reality of reporting would significantly improve both the efficiency and reliability of materiality assessments.
2. The inconsistent nature of ESRS (sub-)topics
Although ESRS1 AR 16 provides a list of sustainability topics to consider in the double materiality assessment, this list proves challenging to use in practice. The topics vary significantly in terms of:
- Different in nature: Some are impacts (e.g. pollution of water, direct impact drivers of biodiversity loss), others are impact drivers (e.g. hazardous substances, energy), responses (e.g. climate change mitigation) or general categories (water).
- Value judgement: Certain ESRS (sub-)topics are normative rather than neutral. For example, “climate change mitigation” implies that action should be taken to reduce emissions, whereas “pollution of water” refers to an adverse impact without implying a course of action. Even if the sub-topic names are similar in nature, the value judgement can be opposite (E.g. Equal treatment and opportunities for all vs. Direct impact drivers of biodiversity loss). This normative framing introduces value judgments into the list of topics, which complicates an objective double materiality assessment. In the DMA process, this leads to difficulties in interpreting subtopics.
This results in confusion, inefficiencies, and inconsistent interpretation.
Our CSRD Simplification Recommendation: develop a harmonised list of topics that are consistent in nature (e.g. all are impacts) and do not contain a value judgement.
3. The interpretation of ‘Circular Economy’ as a topic
The current interpretation of circular economy within the ESRS is quite narrow; it is largely tied to material use, especially in the metrics. However, this excludes what circular economy can entail for different companies. It is important to consider what the relevance of circular economy is before determining how to report on it. This might be:
- Material use: Companies whose operations involve high resource intensity or critical raw materials. For these companies, reporting on material flows and reuse is indeed essential.
- Product: Some products, by design, enable circularity (e.g. modularity, recyclability, durability). Even if the company itself has a limited material footprint, its product may contribute significantly to circular value chains.
- Business model: Certain companies have built their entire model on circular principles, think of leasing, reuse, repair, or sharing platforms.
Our CSRD Simplification Recommendation: adopt a broader framing of circularity that goes beyond material use-related metrics. By focusing too narrowly, the current standards risk overlooking innovation and misrepresenting circular value creation in real business models.
