European Financial Reporting Advisory Group Releases Simplified Reporting Standards Draft

EFRAG releases simplified European sustainability reporting standards draft

The European Financial Reporting Advisory Group (EFRAG), a technical advisory group whose role is to draft and maintain the European Sustainability Reporting Standards (ESRS), has finalised a “simplified draft” of the ESRS that would massively scale back CSRD reporting, cutting required data points by more than 70% and likely removing roughly 90% of companies from the regime once higher size thresholds are in place. Under the revisions, mandatory data points drop by 61%, and all voluntary disclosures are scrapped. 

Going beyond EFRAG’s earlier 68% reduction proposal, the CSRD scope is expected to shift to companies with at least 1,750 employees and €450 million in revenues. EFRAG frames the overhaul as a “competitiveness play” that still aligns with the Green Deal, saying the simplification “fosters greater competitiveness by easing the regulatory landscape without compromising the fundamental objective of the Green Deal to advance sustainability in the European Union.” 

The double materiality assessment is streamlined, with options for a top‑down approach, narrower topic lists, reporting only on material sub‑topics, and no requirement for a full DMA every year. Furthermore, there is a need for significant change, along with greater flexibility to use estimates rather than direct value‑chain data. 

Patrick de Cambourg, Chair of the EFRAG Sustainability Reporting Board, calls the package a “crucial balance… supporting Europe’s competitiveness and reducing unnecessary burden, while preserving the EU’s leadership in sustainable finance.” 

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Further reading: EFRAG Releases Simplified European Sustainability Reporting Standards

EU reviews removing tariffs on Volkswagen EVs built in China

The European Commission has opened a formal review of the “anti‑subsidy tariffs” on Volkswagen electric vehicles built in China. This move could see those duties replaced by a minimum-price commitment rather than outright removal. 

The case centres on VW Anhui, a joint venture with China’s JAC Automobile Group in Hefei, whose exports to the EU currently face an extra 20.7% tariff on top of the standard 10% car duty under rules introduced in October 2024. Seat/Cupra, which imports the China‑built Tavascan electric SUV, has described the 20.7% surcharge as a “serious threat” and even an “existential” risk to the brands, prompting VW Anhui to offer an undertaking combining a minimum import price and an annual quota. 

The Commission will now examine whether this offer is “acceptable and practical”, stressing that any minimum price arrangement must be “as effective and enforceable” as the current tariffs, which were imposed to counter alleged Chinese state subsidies. 

The review is the first test of an April agreement between Brussels and Beijing to explore minimum-price deals for China‑made EVs. It may signal a pathway for other manufacturers seeking relief from the EU’s China EV tariff regime.

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Further reading: EU reviews removing tariffs on Volkswagen EVs built in China

Britain unveils “fast-track licensing” to boost fintech growth

Britain is introducing a “fast-track licensing regime” that will let qualifying fintech startups operate provisionally and carry out some regulated activities for up to 18 months while they seek full authorisation. The move is part of a broader effort to “cut red tape and boost economic growth” after repeated complaints that lengthy, costly approvals have “hampered” firms’ growth and investment. The finance ministry has asked the Financial Conduct Authority (FCA) to create a more flexible route, so high‑potential startups and scale‑ups that meet “robust” entry criteria can begin trading sooner under tighter supervision and with clearly defined limits on what they can do. 

Ministers present the reform as a way to keep the UK competitive as a global fintech hub by shortening time‑to‑market while still requiring firms to transition to full authorisation within the provisional 18‑month window. The FCA says the new regime is designed to “remove barriers to entry for startups” without weakening the UK’s “high regulatory standards,” stressing that regulators will retain powers to restrict activities or withdraw provisional permissions if firms fall short on consumer protection, governance, or capital expectations.

Click here to read the full gov.uk statement.

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Further Reading: Britain unveils fast-track licensing to boost fintech growth

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UK’s Financial Conduct Authority opens consultation on future ESG ratings regulation

The UK’s Financial Conduct Authority (FCA) has opened a consultation, running until March 2026, on a new regime for ESG ratings in the UK, intended to make them more transparent, comparable, and better governed for investors. ESG ratings, which assess companies’ exposure to long-term environmental, social, and governance risks, are widely used for investment decisions, risk management, and regulatory reporting, as global spending on ESG data is projected to reach 2.2 billion dollars this year. 

Under the proposals, providers of certain ESG ratings in the UK will require FCA authorisation from June 2028, with rules focused on transparency, governance and controls, conflict‑of‑interest management, and engagement and complaints processes, largely set out in a new ESG Handbook chapter. 

Pinsent Masons sustainable finance expert Hayden Morgan says the move will bring “much‑needed consistency” to a market currently reliant on “opaque, black box methodologies”. However, Morgan notes uncertainty about “how these will be enforced on non‑UK providers” and the robustness of FCA monitoring.

Financial regulation expert Elizabeth Budd considers the regime “proportionate to the risk created”, pointing to new prudential and operational requirements that ratings providers in scope must analyse and implement to meet the FCA’s expectations.

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Further reading: FCA opens consultation on future of UK ESG ratings regulation

Editor’s Note: The opinions expressed here by the authors are their own, not those of impakter.com — In the Cover Photo: European Union Headquarters. Photo Credit: Thijs ter Haar.