The European Commission adopted revised ESRS

The European Commission adopted revised European Sustainability Reporting Standards (ESRS) and a voluntary reporting standard for smaller companies on 3 July 2026. ESRS covers environmental, social and governance issues, including climate change, biodiversity and human rights. The ESRS provides information for investors and other stakeholders to understand the sustainability-related risks to which companies are exposed and their impacts on people and the environment.

The Corporate Sustainability Reporting Directive (CSRD) require certain undertakings to publicly disclose information concerning the undertaking’s impacts, risks and opportunities in relation to sustainability matters. This information must be reported in accordance with the ESRS and included in a dedicated section of the undertaking’s individual or consolidated management report, as appropriate. 

The Omnibus I simplification package, which entered into force on 18 March 2026 and will have to be transposed by Member States by 19 March 2027, reduced the number of undertakings in scope and simplified the sustainability reporting framework. The revised ESRS is part of the Omnibus I simplification package, and it was designed to reduce administrative burdens for EU businesses while maintaining high quality disclosures.

The European Commission stated that the revision of the existing ESRS should clarify provisions that are deemed unclear and simplify the structure and presentation of the standards. It should also make any other modifications that might be considered necessary, considering the experience gained in the application of the existing ESRS. Sustainability reporting standards should also take account of the difficulties that undertakings might encounter in gathering information from actors throughout their value chain, especially from those which are not subject to the sustainability reporting requirements and from suppliers in emerging markets and economies.

The European Commission emphasized that the revised ESRS is shorter and clearer, introduces new flexibilities, and streamlines key processes. According to the European Commission’s estimates, the revised ESRS reduces the number of mandatory data points by over 60% and the total number of data points by more than 70%. Together, these changes are expected to lower reporting costs by over 30% per company.

The revised ESRS and the voluntary reporting standard shall be submitted to the European Parliament and the Council for scrutiny. The measures will apply once the two‑month scrutiny period, which can be extended by further two months, has ended.