26 Oct 2026 6 min read
The European Commission (EC) adopted the finalised version of the revised European Sustainability Reporting Standards (ESRS). This was followed by a two-month scrutiny period, extendable by an additional two months, where the delegated act was passed to the European Parliament and the Council of the EU. The new regulation will be mandatory for reporting periods beginning on or after 1 January 2027. At the same time, the EC has also adopted a new voluntary reporting standard for entities not captured by mandatory reporting requirements.
On 3 July 2026, the European Commission (EC) adopted the finalised version of the revised European Sustainability Reporting Standards (ESRS). This was followed by a two-month scrutiny period, extendable by an additional two months, where the delegated act was passed to the European Parliament and the Council of the EU.
The new regulation entered into force once it was published in the Official Journal of the European Union, and the reporting requirements will be mandatory for reporting periods beginning on or after 1 January 2027. At the same time, the EC has also adopted a new voluntary reporting standard for entities not captured by mandatory reporting requirements.
This completes a long revision process which has involved technical advice and consultation with the European Financial Reporting Advisory Group (EFRAG) and stakeholders, which has aimed to simplify the requirements of ESRS reporting and reduce the burden on reporting entities.
The final technical requirements that have been adopted are largely the same as those included in the draft delegated act, with some limited updates including:
The key change that has been introduced is related to the transition requirements. With the draft delegated act, reporting entities had the option for FY26 to apply ‘old’ ESRS, or to adopt the revised ESRS early in full. The final delegated act now introduces a third option, in which reporting entities can apply the old version of ESRS, but with eight specific reliefs from the revised standards. The eight reliefs are as follows:
For details of the simplifications proposed by EFRAG in their technical advice, please refer to ‘Sustainability Alert 2025-19’. For details of the additional changes added by the EC, please refer to ‘Sustainability alert 2026-03’.
The EC believes there will be a reduction in reporting costs of more than 30% for each reporting entity as a result of the ESRS simplification.
The scrutiny period for the new delegated act lasted two months and could be extended by another two months, to allow time for scrutiny by the European Parliament and the Council of the EU. As no objections were raised during this period, the delegated act was published in the EU Official Journal on 21 September, at which point it entered into force.
The new ESRS requirements are mandatory for application for reporting periods starting on or after 1 January 2027. Prior to that, the new requirements may be applied for reporting on periods starting from 1 January 2026, applying one of the transitional options listed in the previous section.
We are pleased to see the ESRS simplification project being finalised. It is important to give EU and global entities the certainty to be able to invest in data and reporting processes and enable high-quality sustainability reporting. It remains to be seen how many entities will elect to use the new requirements in full for reporting on the 2026 period, or whether the cost savings will be as extensive as the EC believes. It also is unclear how many smaller entities that are not captured by the scope of CSRD will choose to report using the voluntary standard.
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