Fresh news from Brussels: The revised European Sustainability Reporting Standards ("ESRS 2.0") have reached a crucial milestone. On July 3, 2026, the European Commission officially adopted the delegated acts. This brings the corporate relief package into sharp focus: the revision aims to reduce reporting costs per company by more than 30%.
Along with the delegated acts, the Commission published the final ESRS, the Voluntary Standard (VS) for voluntary reporting, an Explanatory Memorandum, and a Staff Working Document containing explanations of the revision process and changes made to the EFRAG draft. The amendments are based on technical advice from EFRAG (European Financial Reporting Advisory Group) and are part of the Omnibus I package to simplify sustainability reporting, which entered into force on March 18, 2026.
The overarching goal is to significantly reduce the scope of reporting requirements and make their application more practical. At the same time, the core principle of the CSRD remains unchanged: material sustainability impacts must be identified and transparently disclosed.
Following a scrutiny period of up to four months by the European Parliament and the Council of the European Union, the final regulation is scheduled to become mandatory starting from the 2027 financial year. Voluntary application is provided for the 2026 financial year.
Why the European Commission is revising the ESRSMany companies have found the current ESRS requirements highly detailed and administratively burdensome. The Commission is responding to this with the aim of reducing the amount of required information and simplifying the structure. The overarching objective, however, remains the same: to support the EU’s transition towards a climate-neutral, resource-efficient and competitive economy in line with the European Green Deal. According to EFRAG, the revision would:
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The official Explanatory Memorandum highlights that the European Commission did not adopt EFRAG's technical draft unchanged. Instead, targeted adjustments were made to significantly reduce the administrative burden on companies and ensure greater legal certainty.
More legal certainty in reporting: The principle of "fair presentation" will apply in the future to the sustainability statement as a whole, rather than strictly to every single data point. Companies that apply the ESRS correctly automatically fulfill this principle. Companies also receive more leeway regarding the geographical aggregation of data.
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.
Companies are granted more discretion regarding how deeply they must consider specific geographical contexts in their materiality analysis. Additionally, it is clarified that just because data was broken down (disaggregated) for the materiality analysis, it does not mean it must be disclosed at that deep level in the final report.
New regulations from the Omnibus I Directive have been integrated. These allow companies to omit certain information under special circumstances—particularly if its publication could seriously prejudice the commercial or economic position of the company.
Reports on future financial effects are inherently based on estimates. The text clarifies that these estimates can be adjusted when new insights emerge in the future, without this being treated as a retroactive "reporting error."
Important: The exemption rule protecting sensitive business data (competitive disadvantage) applies here as well. Furthermore, an additional one-year phase-in period is introduced for qualitative and quantitative data (see the table below).
To better align with global standards, companies are given the flexibility to define their reporting boundaries using either the financial control or operational control approach.
Companies publishing transition plans with targets that are incompatible with the Paris 1.5°C goal must absolutely and transparently disclose this lack of compatibility in their report.
Disclosure requirements are restricted to primary microplastics. For reasons of feasibility and proportionality, no metrics need to be reported for secondary microplastics.
The decision on which pollutants are classified as "material" for reporting purposes is to be made based on a management assessment. This must take into account the company's specific activities and sector.
For companies using products or articles containing such substances of concern, a new one-year phase-in period is introduced for reporting (see the table below).
Various technical adjustments were made regarding due diligence obligations to guarantee seamless alignment with the CSDDD (Directive (EU) 2024/1760).
The text clarifies that only "substantiated" cases must be reported—since not every reported suspicion is automatically true. Additionally, the reference to merely "initiated" court or administrative proceedings has been deleted.
Financial institutions managing investments under a fiduciary duty on behalf of clients may omit these investments from their own sustainability statement. The reason: these investments primarily concern the clients' activities and not those of the institution itself. Furthermore, these sustainability aspects are already regulated at the EU level by other laws (such as the Sustainable Finance Disclosure Regulation - SFDR). This prevents unnecessary bureaucracy and double reporting.
The following changes and reliefs prepared by EFRAG were adopted by the European Commission as proposed:
Extended transition periods for companies
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 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 |
| Anticipated financial effects (quantitative) | Mandatory from FY 2030 | Not mandatory in the first three financial years |
| 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.)
The 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.