• inflation of ESG questionnaires;
• high costs of data collection;
• increase in the number of requests addressed to suppliers;
• methodological difficulties regarding certain indicators;
• Documentary surcharge for SMEs and small businesses.

In this context, the simplification projects introduce several new or strengthened mechanisms:

• top-down approaches to materiality;
• increased use of «reasonable and proportionate» information;
• exemptions based on ’unreasonable cost or effort«;
• partial reporting areas;
• use of approximations and sectoral averages;
• limitations on requests addressed to companies protected by the value chain cap.

These developments constitute a pragmatic response to the operational difficulties encountered since the initial work to implement the ESRS began.
However, they raise a major methodological question: How can consistency, comparability, and verifiability of reporting be ensured when it increasingly relies on judgments based on criteria of feasibility and proportionality?
This is precisely the issue raised by several professionals in the independent verification of sustainability information, particularly in the observations recently made by Powness-OTI.
These questions directly concern the future practices of supervision, assurance and methodological harmonization of European sustainability reporting.

The first generation of ESRS was based on a relatively prescriptive logic:

• extended identification of impacts, risks and opportunities;
• significant volume of data points;
• strong thematic granularity;
• a broad approach to the value chain.

In this model, the verification work focused primarily on:

• the consistency of the data in the declaration;
• the robustness of the processes of dual materiality;
• the traceability of the published data;
• compliance with the requirements of the ESRS framework.

The main identified risk at the time was that of operational overload.

The Omnibus logic gradually changes this balance.
The future simplified framework now gives a greater place to:

• in matters of materiality;
• to the considerations of feasibility;
• to the practical limits of collection;
• to operational and economic constraints.

In other words, fewer mandatory data points, but more methodological judgments made by companies.
This evolution is consistent with the objective of simplification.
However, this creates a new grey area: the more reporting relies on proportionality mechanisms, the more the quality and traceability of reasoning become decisive.

One of the central points raised in the Powness-OTI opinion, to be consulted HERE, The following is the situation: the current projects simplify reporting obligations, but still do not specify sufficiently the extent to which the justifications for these simplifications themselves fall within the scope of insurance.
This question is far from theoretical.
Simplified drafts introduce or reinforce several concepts that rely heavily on judgment:

• « undue cost or effort »;
• « reasonable and supportable information » ;
• «practicability»;
• « significant drivers » ;
• partial reporting areas;
• use of sectorial estimates or averages.

But these concepts necessarily require:

• criteria;
• governance;
• documentation;
• and a capacity for justification.

The challenge is therefore not to prevent simplification. The challenge is to ensure that:

• the arbitrations remain explainable;
• the reasoning remains traceable;
• and that the sustainability reports continue to meet a principle of faithful representation.

An industrial company must publish its indirect emissions related to its purchases of raw materials (steel, aluminum).
For some categories of Scope 3, it uses average sectoral emission factors rather than primary data providers, considering that exhaustive collection would entail a disproportionate cost or effort.

Without specific clarification of the framework, the company could consider that simply mentioning this approach in its preparation document is sufficient to meet the transparency requirements.
But the central question becomes:

• How did the company appreciate the «disproportionate» nature of the collection effort?
• What alternatives have been studied?
• What tools or collection devices already existed?

In a logic of verifiable reporting, the company should be able to:

• document the reasoning followed;
• explaining the limitations encountered;
• justify the use of sector averages;
• demonstrate the consistency of the approach adopted with its real operational capabilities.

In this context, the OTI could appreciate:

• the consistency of the justification provided;
• the traceability of the decision-making process;
• and the consistency of the assumptions used.

For example, if the company already has vendor tools that reasonably allow the collection of primary data, this could lead to challenging the truly «disproportionate» nature of the effort invoked.

This approach helps to limit:

• the risks of methodological greenwashing;
• excessive divergences in sectoral practices;
• and the situations in which approximations would be used for convenience rather than by real operational constraints.

An international group has a production site located in an area where human rights issues are high on the agenda.
As part of its reporting on «own personnel» (ESRS S1), the company limits its scope of collection to its European facilities, considering that collecting reliable information about the site in question would require an effort disproportionate to local operational and security constraints.

This type of situation raises a particularly sensitive question: how can we avoid that proportionality mechanisms lead to the exclusion of precisely the areas most exposed to impacts?
In this context, the quality of the documentation becomes essential:

• real operational constraints;
• inability to access;
• limits of reliability of the data;
• security restrictions;
• considered alternatives.

The interest of the approach advocated by Powness-OTI is to make:

• the explicit reasoning;
• traceable arbitration;
• and the methodological limitations that are understandable for the users of the reporting.

The company should therefore be able to demonstrate:

• why some data could not be collected;
• what reasonable diligence has been exercised;
• and why the limitations adopted remain compatible with a faithful representation of the material issues at stake.

In this context, the OTI does not «validate» a management choice, but can assess it:

• the consistency of the reasoning followed;
• the quality of the available documentation;
• and the transparency of the information provided in the sustainability report.

This approach helps to limit:

• the risks of arbitrary exclusion of sensitive areas;
• criticisms regarding artificially restricted areas;
• and excessive differences in interpretation between companies or auditors.

In this type of situation, the difficulty does not only lie in the existence of a collection limitation. It mainly lies in:

• the manner in which this limitation is assessed;
• the criteria used;
• the assumptions used;
• and the ability to demonstrate that the decision does not result from subjective arbitration.

The proposed approach leads the company to:

• explaining the analyses carried out;
• document the identified technical and economic constraints;
• justify the link between estimated significance and expected level of effort;
• and integrate these elements into its preparation base.

Within this framework, the OTI may assess:

• the methodological coherence of the reasoning;
• the quality of the available documentation;
• and the clarity of the information provided to users of the sustainability reports.

In the event of a subsequent event affecting the value chain, the company would be better able to demonstrate that:

• The reporting limitations resulted from a documented methodological judgment;
• the arbitrages had been explained;
• and the assumptions were submitted to the OTI’s assessment within the framework of its assurance mission (independent verification).

This approach thus helps to distinguish an explicitly stated and governed methodological limitation from an omission insufficiently justified.

The approach advocated here does not consist in reintroducing the initial heaviness of the ESRS.
It aims rather to preserve a balance between simplification, proportionality, transparency and audibility. This logic is consistent with:

• the principles of faithful representation;
• the standards for verification sustainability information;
• historical audit practices;
• as well as with the fundamental objectives of the CSRD.

In any methodological framework of independent verification, estimates, assumptions, boundary conditions, and methodological choices constitute important areas of assessment based on professional judgment.

This evolution also changes the nature of the verification missions. The initial model of ESRS primarily led to:

• control the publication data;
• checking indicators;
• appreciate levels of completeness.

The future simplified framework will shift the focus more towards:

• the robustness of the reasoning;
• the quality of the materialization processes;
• the governance of arbitrations;
• the consistency of the assumptions;
• the justification for the limitations applied.

In other words:
The verification mission is gradually evolving from a logic centered on the completeness of the data towards a logic more oriented towards the quality and traceability of the judgments made.

The simplification of ESRs constitutes a necessary and largely justified evolution. But the more reporting will be based on:

• on mechanisms of proportionality;
• on substitute data;
• on justified limitations to collection;
• and on assessments of operational difficulties,

The more essential it will become to:

• documenting the arbitrations;
• clarify the reasoning;
• and maintain verifiability mechanisms compatible with the trust objectives of the CSRD framework.

The challenge is therefore not to return to an excessively prescriptive model.
The challenge now is to build a simplified, proportionate, credible, and verifiable framework.
This is precisely the methodological contribution provided by the observations formulated by Powness-OTI (see the opinion on the EU commission website). HERE).

• Delegated Regulation (EU) 2023/2772 (ESRS « Full ») This text defines the principles of fair presentation and imposes transparency on the calculation methods within the BP-1 preparation base.
• Draft delegated regulation «Omnibus I» (2026) The text that officially introduces the simplifications, the criterion for Excessive cost or effort (unnecessary cost or effort) and the protection mechanism for the value chain (Cap on the value chain).
• Directive (EU) 2022/2464 (CSRD) The basic legislative act that makes it Compulsory verification (assurance) to ensure that the information published is reliable and comparable.
• International Standard for Insurance ISSA 5000 (IAASB) : The global reference framework for auditors, specifying how to challenge judgments and estimates from management to avoid reporting biases.

If the directive Omnibus I affords companies the right to simplification, the standards ESRS 1 and 2 maintain the duty to provide information Verifiable. The ability to document and make the justifications for feasibility verifiable thus appears as an important condition for the credibility and principles of faithful presentation expected within the framework of sustainability reporting.

At POWNESS-OTI, we are convinced that sustainability insurance preparation must begin before the regulatory requirement. Are you a company subject to an verification or a financier/investor seeking reliable assurance? POWNESS-OTI explains everything about sustainability reporting audits and answers all your questions.

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