On May 6, 2026, the European Commission published a consultation draft for the revised European Sustainability Reporting Standards (“ESRS 2.0”). The proposed amendments are based on technical advice from EFRAG, the European Financial Reporting Advisory Group, and form part of the Omnibus I package aimed at simplifying sustainability reporting, which entered into force on 18 March 2026. Feedback can still be submitted via the EU consultation portal until 3 June 2026.
The new draft is intended to significantly reduce the scope of reporting obligations and make the standards more practical to apply. At the same time, the core principle of the CSRD remains unchanged: material sustainability impacts must be identified and disclosed transparently.
Following a scrutiny period of up to four months by the European Parliament and the Council of the European Union, the final regulation is expected to become mandatory from the 2027 financial year onwards. Voluntary application is envisaged for the 2026 financial year.
One of the most important changes concerns the double materiality analysis. The draft significantly streamlines what has so far been a highly detailed assessment process.
In future, companies should be able to make greater use of a top-down approach. This means that, rather than examining all potentially material sustainability matters and data points in detail from the outset, companies would first carry out a broader assessment based on key corporate characteristics, such as their business model, strategy, sector and value chain.
A more in-depth assessment of individual topics would only be required where this initial analysis indicates further material impacts, risks or opportunities. This reduces effort and complexity and makes the process easier to manage, particularly for first-time reporters.
EFRAG recommends removing 489 mandatory data points from the existing ESRS. This represents a reduction of around 61%. The main focus is on cutting extensive narrative requirements and disclosure obligations that provide limited informational value to users of sustainability reports.
The aim is to focus reporting more clearly on material information and factors relevant to decision-making, while making the standards easier to understand and apply in practice.
The revised ESRS draw a clearer line between mandatory requirements and supplementary guidance. The draft proposes removing previously voluntary and optional disclosures from the legally binding standards. Examples, explanations and optional guidance are instead expected to be included in the Non-Mandatory Illustrative Guidance (NMIG), which EFRAG will provide as an accompanying document.
This makes the legally binding standards leaner and easier to navigate. At the same time, practical support remains available, but is more clearly separated from the mandatory requirements.
The ESRS draft also introduces noticeable relief when it comes to obtaining information from within the value chain. Where reliable data is not yet available, companies would initially only have to disclose the steps they have taken to obtain that information.
In addition, a “value chain cap” is to be introduced. This will be based on the new Voluntary Standard (VS), a voluntary reporting framework derived from the previous VSME standard.
In practical terms, this means that companies subject to CSRD reporting obligations will in future only be able to request from non-reporting business partners with up to 1,000 employees the information expressly required by that standard. This is intended to protect smaller companies from disproportionate data requests.
The ESRS draft also proposes a revised structure for the standards. Many disclosures that were previously spread across different sections — including governance, strategy, business model, and impacts, risks and opportunities — will in future be consolidated in ESRS 2, “General Disclosures”. The topical standards will therefore focus more closely on specific disclosure requirements and metrics.
In addition, the existing “Minimum Disclosure Requirements” (MDR) will be renamed “General Disclosure Requirements” (GDR). The basic structure of policies, actions, targets and metrics remains in place, but becomes more flexible: In future, overarching policies and actions may be presented and cross-referenced either across topics or bundled at the level of individual topical disclosures. This should reduce repetition and present interconnections more clearly.
The methodological guidance in the “Application Requirements” has also been systematically streamlined and placed directly after the relevant disclosure requirement. This is intended to make the remaining requirements easier to apply.
The European Commission's draft also provides for longer transition periods for various disclosure requirements.
For Wave 1 companies — formerly within the scope of the NFRD and subject to reporting requirements since the 2024 financial year — and Wave 2 companies — large companies that, as a result of the Omnibus I package, will first have to report in 2028 for the 2027 financial year — the revised ESRS draft provides for extensive relief.
| Disclosure | Relief for Wave 1 companies | Relief for Wave 2 companies |
| Value chain disclosures | For the first three reporting years, it is sufficient to describe the steps taken to obtain the relevant data. | |
| Comparative information | In the first reporting year after the new ESRS enter into force, prior-year data only needs to be prepared where the methodology for the relevant metric remains unchanged. Where methodologies are new or have changed, comparative information is not required. | |
| Topical standards: ESRS E4, ESRS S2, ESRS S3, ESRS S4 |
Suspension for FY 2025 and FY 2026; mandatory application is only envisaged from FY 2027 onwards | Not mandatory in the first two financial years |
| Note: Non-disclosure must be explained in the sustainability report. | ||
| Anticipated financial effects (qualitative) | Mandatory from FY 2027 | Mandatory from the second financial year |
 Exception: the carrying amount and share of assets exposed to climate or transition risks must be reported from the outset. |
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| Anticipated financial effects (quantitative) | Mandatory from FY 2030 | Not mandatory in the first three financial years |
| Exception: the carrying amount and share of assets exposed to climate or transition risks must be reported from the outset. |
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| Substances of Concern (SoC; ESRS E2): chemicals and materials that may pose a risk to health or the environment and are subject to monitoring or observation under EU chemicals legislation |
Mandatory from FY 2030 | Not mandatory in the first three financial years |
| Substances of Very High Concern (SVHC; ESRS E2): particularly hazardous substances under REACH, such as carcinogenic, mutagenic or persistent substances |
For users of articles containing SVHC: mandatory from FY 2028 | Mandatory from the second financial year |
| Specific own-workforce data points (ESRS S1): workforce structure, wages and social protection, diversity and inclusion, training for external workers, occupational health and safety |
Mandatory from FY 2027 | Mandatory from the second financial year. |
For many companies, these measures create additional time to build processes, data systems and responsibilities step by step.
(Background: tips and insights from the first reporting wave can be found in our blog post: CSRD – Wave One: Lessons learned, quick fixes and practical tips.)
In addition to the structural changes outlined above, the ESRS 2.0 draft contains further amendments of practical relevance.
Companies reporting under several standards in parallel will therefore be better able to harmonise their greenhouse gas accounting and ESG reporting, and reduce parallel reporting structures.
Disclosures on anticipated financial effects are often based on estimates. The draft now expressly clarifies that updated or more precise estimates are not automatically to be treated as reporting errors, provided they are based on new or better information.
This had not previously been expressly regulated and provides greater legal certainty as companies gradually improve their data quality and methodologies.
Under certain conditions, companies may withhold confidential information if its disclosure would seriously harm their competitive position. This exemption also applies to expected financial effects.
The proposed ESRS 2.0 simplify sustainability reporting in a number of ways — through reduced data requirements, streamlined process steps and longer transition periods. The core of the CSRD remains unaffected: The requirements for strategic sustainability work and management remain in place; material environmental and social impacts must still be identified, measures implemented, monitored and reported transparently.
Our recommendation for the transition period: use the additional lead time to:Setting up robust processes and structures at an early stage not only puts you in a good regulatory position, but also strengthens your strategic position — regardless of the exact outcome of the consultation.
Would you like to align your sustainability reporting with the new ESRS requirements early on, or further develop your existing ESG processes?
EurA supports companies in implementing regulatory requirements in a practical and targeted way — from double materiality analysis, data management and reporting structures through to audit-ready sustainability reporting in line with relevant ESG requirements such as the CSRD and EU Taxonomy.
Together, we create efficient processes, robust data structures and sustainable solutions with strategic added value.
EU consultation page: The current consultation and the draft delegated regulation on the European Commission's Better Regulation Portal.
↗ Go to the portal
Please note: Interested parties can still submit feedback on the ESRS 2.0 until June 3, 2026. Get involved!
For any questions about the consultation or the revised ESRS requirements, please do not hesitate to contact us.
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