European Commission Adopts Revised Version of the ESRS: Less Complexity, Greater Focus on Relevant Information
The European Commission adopted, on July 3, 2026, the delegated act that revises the European Sustainability Reporting Standards (ESRS), taking another step toward implementing the legislative package Omnibus I, which aims to simplify sustainability reporting requirements without compromising the quality and usefulness of the information disclosed.
The revision is the result of a process that included a technical opinion from EFRAG, a public consultation conducted by the European Commission, and input from companies and other stakeholders. The goal is to make reporting more proportionate, reduce administrative burdens, and facilitate the practical application of the requirements by companies.
What's changing?
The revised version of the ESRS retains the fundamental principles of the CSRD—including the dual materiality — but it introduces significant changes to simplify the reporting process.
Among the main new features are:
A reduction of more than 60% in the number of required data points and more than 70% of the total number of disclosure requirements, eliminating information considered redundant or of lesser importance;
Greater emphasis on quantitative information, reducing the need for lengthy narrative descriptions;
Clearer guidance on the application of the materiality principle, allowing companies to focus their reporting on the issues that are truly relevant;
Greater alignment with other international standards, promoting interoperability among different reporting standards;
Relaxation of requirements related to the value chain, acknowledging the difficulties in obtaining information from suppliers and partners, especially when they are not subject to the same reporting requirements.
According to the European Commission, these changes could result in a a reduction of more than 30% in reporting costs, helping to reduce the administrative burden on companies without compromising the transparency of sustainability disclosures.
Implementation of the new standards
The revised rules will apply beginning with fiscal years starting on January 1, 2027, and companies may choose to apply it early, as early as the 2026 fiscal years, following the entry into force of the delegated act. Before that, the text will still be subject to a review period by the European Parliament and the Council of the European Union.
What does this mean for businesses?
Although the new framework significantly reduces the amount of information to be disclosed, the Commission's message is clear: Simplifying does not mean lowering the standards for sustainability management.
Companies continue to need robust processes to identify impacts, risks, and opportunities, ensure the quality of ESG data, and integrate sustainability into their business strategy. The focus is now shifting from the quantity of reported information to its relevance, consistency, and credibility.
For many organizations, this review represents an opportunity to move beyond a mindset of compliance toward an approach in which sustainability reporting is used as a tool for management, value creation, and enhancing competitiveness.
In an ever-changing regulatory environment, maintaining a strategic vision of sustainability will continue to be a key differentiator for companies seeking to meet the expectations of investors, customers, partners, and other stakeholders.
