On 3 July 2026, the European Commission formally adopted the Delegated Act containing the revised (simplified) European Sustainability Reporting Standards (ESRS), the detailed reporting framework for companies subject to the Corporate Sustainability Reporting Directive (CSRD). The adoption follows EFRAG’s final technical advice, submitted on 3 December 2025, and a public consultation on the Commission’s draft in May–June 2026. A separate Delegated Act establishing a voluntary sustainability reporting standard for undertakings outside the CSRD’s scope was adopted at the same time.
The Delegated Act now enters a scrutiny period of the European Parliament and Council, typically two months, before it takes effect. Once in force, CSRD-scope entities must apply the revised ESRS for financia l years beginning on or after 1 January 2027, with early voluntary adoption permitted for FY2026.
The Commission’s adopted text largely follows EFRAG’s advice, with a 61% reduction in mandatory datapoints compared to the original ESRS, plus targeted modifications made after consulting Member States and bodies such as ESMA, EBA, EIOPA and the ECB. The shift moves reporting away from a checklist approach towards focused, decision-useful disclosures.
The adopted ESRS place stronger emphasis on materiality as an overarching principle, including in ESRS 2’s general disclosures. Under ESRS 1, the double materiality assessment determines which topical disclosures apply — e.g., material climate matters trigger ESRS E1 disclosures, while non-material topics like biodiversity (ESRS E4) can be omitted. Documenting how these conclusions were reached is now more important than ever: assurance providers will scrutinise not just what you report, but the process behind it.
The standards now explicitly emphasise decision-usefulness for impact materiality — disclosures should explain the significance of impacts, not just describe them. No new disclosure requirements are introduced, but the direction on quality is clearer.
The adopted ESRS strengthen fair presentation and better align financial materiality with IFRS S1, improving comparability for organisations reporting under both frameworks — though some ESRS reliefs still go beyond ISSB standards.
Key changes include fewer mandatory datapoints, more flexibility to use estimates for value chain data, a more principles-based approach to policies/actions/targets, and removal of Appendix C from ESRS 1. Together these make the standards less burdensome to apply.
EFRAG removed governments, analysts and academics from the list of “other users” of sustainability statements, reinforcing that reports should prioritise investors and other capital providers.
With the substance now settled, use this period to review your materiality assessment process, reporting governance, supporting evidence, and readiness of internal controls and assurance processes. You’ll need to demonstrate not just what you report, but why information was included or excluded.
As the Delegated Act completes scrutiny and enters into force, strong governance, documentation and assurance readiness will matter most.
For non-EU companies: work has resumed on the Non-EU ESRS (N-ESRS), with scope cut from ~10,000 to ~1,200 companies (an 88% reduction). A public consultation is expected to launch mid-July 2026 (running 100 days), with EFRAG’s technical advice due to the Commission by January 2027. N-ESRS reporting begins for financial years from 1 January 2028, with first reports due in 2029.
The Commission has formally adopted the revised ESRS, emphasising materiality, fair presentation and decision-useful information. Once the Delegated Act clears scrutiny, it applies from FY2027 (voluntary early adoption for FY2026) — sustainability reporting is now confirmed to be more proportionate and principles-based, while staying reliable and transparent.
