Revised ESRS Are Final: What Applies From 2027

On 3 July 2026 the European Commission adopted two delegated acts: one revising the European Sustainability Reporting Standards (ESRS), and one establishing a voluntary reporting standard for undertakings protected by the value chain cap. Adoption started a two-month scrutiny period for the European Parliament and the Council of the EU. That period has now closed without either institution objecting.

The texts are therefore final. The revised ESRS apply to financial years beginning on or after 1 January 2027, with the first reports under them due in 2028. Companies already reporting may choose to apply the revised standards a year early, for financial year 2026.

The timeline

What the revision was mandated to do

Recital 18 of Omnibus I required the Commission to amend the ESRS within six months of that directive entering into force, along six lines: remove the datapoints least important for general purpose reporting; prioritise quantitative datapoints over narrative text; draw a sharper line between mandatory and voluntary datapoints; give clear instructions on applying the materiality principle; improve consistency with other Union legislation, including financial services law; and preserve interoperability with global sustainability reporting standards as far as possible.

EFRAG’s advice, developed through a call for input, interviews, field tests and a public consultation on the exposure drafts, delivered that by shortening and clarifying the standards, adding reliefs and phase-ins, and reducing mandatory datapoints by 61% while keeping the core objectives of the European Green Deal. The materiality assessment was simplified with principle-based guidance, and the standards now state that an undertaking is not required to disclose ESRS information that is not material.

What the simplification is expected to save

EFRAG’s cost-benefit analysis puts average reporting cost savings at 34% of baseline costs over five years for undertakings in scope: 28% in 2027, rising to 38% in 2028, then stabilising at roughly 33–36% from 2029 once all reporters are on the revised framework. Cumulative savings over 2027–2031 are estimated at EUR 3.7 billion, or around EUR 4.7 billion once value chain effects are included, close to 44% of baseline costs. These figures relate to the standards EFRAG proposed, not to the final adopted text.

Where the Commission changed EFRAG’s advice

After consulting Member States, the ESAs, the ECB, the EEA, the FRA, CEAOB and the Platform on Sustainable Finance, the Commission made targeted modifications, mostly to clarify provisions and add flexibility:

• Materiality: undertakings “shall not” report information that is not material, except in clearly defined circumstances, rather than merely not being required to. A new provision confirms that the top-down approach avoids assessing the materiality of every individual impact, risk or opportunity.
• Fair presentation: applies to the sustainability statement as a whole, not to each datapoint; applying the ESRS results in fair presentation.
• Aggregation: more discretion over how far geographical context must be considered, and confirmation that the level of disaggregation used for materiality assessment need not be the level at which information is reported.
• Omission: Omnibus I provisions allowing information to be omitted where disclosure would be seriously prejudicial to the undertaking’s commercial position are carried into the standards.
• Anticipated financial effects: estimates are expected, and later updates are not reporting errors. One additional phase-in year applies to both qualitative and quantitative information.
• Greenhouse gas emissions: undertakings may set the reporting boundary using either the financial control or the operational control approach, aligning more closely with global standards.
• Climate transition plans: where reported targets are not compatible with 1.5°C, the undertaking must say so transparently.
• Microplastics: disclosure is limited to primary microplastics; metrics on secondary microplastics are not required.
• Pollutants: which pollutants are material follows from a managerial assessment of the undertaking’s activities and sector.
• Substances of very high concern: a one-year phase-in for undertakings that are users of articles containing them.
• Asset management: financial institutions managing client investments under a fiduciary mandate need not disclose in relation to those investments, which are already governed by Regulation (EU) 2019/2088 and Delegated Regulations 2017/565 and (EU) 2017/593.
• Human rights and discrimination incidents: only substantiated, verified instances are reported, and the reference to “initiated” proceedings is removed.
• CSDDD coherence: technical changes to the due diligence provisions align them with Directive (EU) 2024/1760.

The choice for financial year 2026

Article 2 of the new regulation gives current reporters three options for financial years starting between 1 January and 31 December 2026:

• apply the existing ESRS as last amended by Delegated Regulation (EU) 2025/1416;
• apply the revised standards early; or
• apply the existing standards together with a defined set of reliefs from the revised text.

The named reliefs sit in ESRS 1: paragraph 27 on the top-down approach to double materiality; paragraphs 32–33 on undue cost and effort and value chain limitations; paragraphs 74–75 on acquisitions and disposals; paragraph 90 on metrics for non-significant activities; paragraph 91 on partial reporting scope of the value chain; paragraph 92 on joint operations; paragraph 106 on presenting Taxonomy disclosures in a separate appendix; and paragraph 110 on the executive summary.

Whichever route is taken, the sustainability statement must state clearly which version of the standards was applied for that year.

The voluntary standard, and the value chain cap

The companion delegated act establishes sustainability reporting standards for voluntary use by undertakings protected by the value chain cap: companies outside CSRD’s scope that are nonetheless asked for sustainability data by customers, lenders and investors. The cap means a protected undertaking can decline requests that go beyond what the voluntary standard covers. For most smaller suppliers, that standard is now both the practical answer to data requests and the ceiling on them.

What it means in practice

If you are in scope of CSRD

The 2027 financial year is the first under the revised standards, so the preparation work happens through 2026. Two decisions are worth taking early: whether to adopt the revised standards for FY2026 rather than waiting, and which greenhouse gas consolidation approach to use now that financial and operational control are both permitted. Gap analysis against the reduced datapoint set will usually shrink the data collection burden rather than expand it, but the materiality assessment needs revisiting, since reporting non-material information is now discouraged rather than merely unnecessary.

If you have fallen out of scope

The obligation is gone; the data requests are not. Customers and lenders in scope still need value chain information, and a voluntary disclosure prepared to the EU standard answers those requests once, in a form that is recognised, instead of repeatedly through bespoke questionnaires.

If you are a supplier to a large reporter

The value chain cap gives a clear reference point for what can reasonably be asked of you. Knowing where that line sits, and having the basic figures ready behind it, turns a compliance demand into a short conversation.

How ecorune can help

We help companies work out which version of the standards to apply and when, run or refresh the double materiality assessment under the clarified rules, set the greenhouse gas reporting boundary, and prepare proportionate voluntary disclosures for organisations outside CSRD’s scope.

Read next: VSME Explained: A Simpler Path to Sustainability Reporting, and Double Materiality Assessment: A Practical Introduction.