Revised ESRS: Practical Considerations for CSRD Reporters
The revised ESRS are intended to make CSRD reporting more workable, but they do not remove the need for clear judgement, disciplined data ownership and defensible disclosure choices.
On 3 July 2026, the European Commission adopted the revised ESRS and a Voluntary Standard, marking the latest step in the EU’s effort to make CSRD reporting more practical and proportionate for companies. The standards are now subject to scrutiny by the European Parliament and Council and will become legally effective only after publication in the Official Journal.
The revised European Sustainability Reporting Standards are intended to make reporting more workable, but they do not remove the need for clear judgement, disciplined data ownership, and defensible disclosure choices. For companies, the immediate challenge is to understand what has changed, manage the FY2026 transition, and use simplification to improve the quality and usefulness of reporting rather than simply reduce disclosure volume.
The rationale for the revision is straightforward: to reduce reporting burden, clarify requirements, make materiality assessments easier to apply, improve consistency with EU law, and support better alignment with global sustainability reporting standards.
The result is a significant simplification of the reporting framework. The Commission says datapoints are reduced by over 70%, with expected reporting cost reductions of more than 30% per company. But this is not deregulation in the sense of making sustainability reporting optional for in-scope companies; the revised ESRS still require disclosure of material impacts on people and the environment and material sustainability-related risks and opportunities, the core of double materiality.
Despite broad support for simplification, debate continues over whether the revisions strike the right balance between usability and decision-useful disclosure—and that matters for CFOs and reporting leaders.
EFRAG and the Commission frame the package as a more proportionate system that should reduce friction for preparers while preserving the CSRD’s objectives. BusinessEurope welcomed some changes but argued they do not go far enough to reduce complexity, legal uncertainty and operational burden. Investors and sustainability data users broadly welcomed simplification but urged the Commission not to cut further and to preserve anticipated financial effects, double materiality and fair presentation. The European Central Bank (ECB) welcomed the “very significant simplification” but warned that extensive reliefs and phase-ins could reduce transparency, comparability and financial-risk relevance.
What changed from the original ESRS? Key Changes in the revised ESRS
The biggest shift is a move away from a detailed checklist approach toward a more judgement-based reporting framework. Fair presentation now applies to the sustainability statement as a whole rather than to individual datapoints in isolation, while materiality functions as a broader filter for determining what information should be disclosed. Companies are also explicitly discouraged from reporting non-material information. The double materiality assessment remains, but the revised ESRS permit a more top-down approach based on business model, strategy, sector, geography, and value chain features, with targeted deeper assessment where materiality is less clear.
The reporting architecture has also been streamlined. Minimum Disclosure Requirements have been reframed as General Disclosure Requirements, application requirements have been moved closer to the relevant disclosure requirements, and voluntary datapoints have been removed or recast. Companies may also use appendices, cross-references, and executive summaries to improve readability. While the topical standards remain unchanged—with two cross-cutting standards and ten topical standards—several datapoints have been deleted, consolidated or made more principles-based. The result is a framework that is intended to be less prescriptive while preserving the core reporting architecture.
Three areas warrant particular attention:
- Anticipated financial effects remain part of the framework, including qualitative and quantitative information on how material sustainability risks and opportunities may affect financial position, performance, and cash flows. However, the revised package adds reliefs and extended phase-in periods.
- GHG reporting boundaries are more flexible, allowing companies to apply financial control, operational control, or equity share approaches. This may affect methodology, comparability, and assurance considerations.
- Value chain reporting takes a more pragmatic approach. Companies may use estimates where direct data is not reasonably practicable, while the Voluntary Standard introduces a value-chain cap that limits information requests to smaller entities within the value chain.
Preparing for the revised ESRS: Insights from ISS-Corporate
To gauge market sentiment around the revised ESRS, we asked Stian Køhn Berget and Hedvig Sundby from ISS-Corporate’s Sustainability Advisory team how companies are responding.
What should companies prioritise first when preparing for the revised ESRS?
Hedvig Sundby: First, companies that reported under the original ESRS face a transition decision for FY2026. Under the proposed revisions, Wave 1 companies may either continue reporting under the original ESRS requirements or, once the revised ESRS Delegated Act becomes effective (currently expected in November 2026), elect to early adopt the revised ESRS. Companies must disclose which basis they have applied. This is a governance decision, not only a technical reporting choice.
Second, companies should refresh rather than repeat the DMA. The revised ESRS enable a more proportionate top-down approach, but conclusions still need supportable evidence, affected-stakeholder input where relevant, and clear documentation of judgement. A faster DMA that cannot explain why topics were excluded is unlikely to satisfy investors, auditors or supervisors.
Third, reporting teams need to redesign data ownership and controls. The use of reliefs, such as undue cost or effort provisions and partial scope approaches, together with the use of estimates where precise information is unavailable, can reduce reporting burden. However, these approaches increase the need to document assumptions, limitations, improvement plans and management approval. CFOs should treat sustainability data governance as part of enterprise reporting discipline, particularly where disclosures connect to financial effects, capex, opex, assets, liabilities, targets and scenario analysis.
Fourth, companies should not let simplification damage comparability. Investors have explicitly argued that anticipated financial effects, fair presentation and double materiality remain essential for capital allocation and risk assessment. The most credible reporters will use simplification to remove clutter, not to hide material risks.
Finally, interoperability should not be treated as full alignment. The revised ESRS improve alignment with ISSB standards in areas such as fair presentation, anticipated financial effects and GHG accounting boundaries, but ESRS still retain double materiality, broader topical coverage and value-chain requirements. Companies applying multiple frameworks should therefore build one reporting architecture with mapped framework-specific requirements: one data foundation, one control environment, and transparent reconciliation of differences between ESRS, ISSB and other applicable frameworks.
Did the revised ESRS capture the lessons from the first wave of ESRS reporting?
Stian Køhn Berget: What we hear from companies is that the revisions address many of the practical pain points from the first reporting cycle, but not all of them. Preparers were looking for a more workable approach to materiality, less duplication, clearer distinctions between mandatory and voluntary content, and reports that were easier to navigate. The evidence base supports that view: EFRAG says the exposure drafts drew on extensive feedback from companies already reporting or preparing to report, including more than 800 survey responses, public consultation and stakeholder engagement; the Commission also refers to interviews, outreach events, field tests, ESRS Q&A analysis and benchmarking of 2024 sustainability statements. EFRAG’s 2026 State of Play points in the same direction, showing maturing practice, with 82% of companies updating their DMA, 67% using a hybrid top-down/bottom-up approach, and average sustainability statement length falling from 115 to 95 pages.
So, broadly yes, the revised ESRS reflect lessons from early implementation. However, simplification also reflects the wider Omnibus political agenda, so not every change can be read as a direct response to preparer experience.
Did simplification go too far, not far enough, or strike the right balance?
Stian Køhn Berget: The consensus position is that simplification was needed and that retaining double materiality, fair presentation and anticipated financial effects preserves the framework’s backbone. Companies broadly welcome the direction of travel, particularly where the revisions reduce duplication, clarify materiality and make reporting less checklist-driven. However, headline datapoint reductions should be read carefully. In some areas, rewritten datapoints may reduce the formal count without materially reducing what companies are expected to disclose in practice. Scope 1, 2 and 3 GHG emissions are a useful example: the datapoint structure has been cut back and made clearer, but the substantive reporting expectation may remain largely the same once methodology, boundaries, assumptions and explanatory context are considered.
That is also why the main benefit may be less about reducing ambition and more about improving usability. The original ESRS and supporting materials often read like a quilt, with requirements, clarifications and interpretive guidance spread across the standards, application requirements, FAQs and implementation material. The revised ESRS appear more cohesive and better put together, with many clarifications incorporated directly into the standards. At the same time, some preparers still see the framework as complex, while investors and other users are concerned that broad reliefs or deleted datapoints could weaken comparability and transparency. The debate should therefore principally be about safeguards. Are companies using reliefs sparingly, explaining limitations clearly and keeping decision-usefulness as the organising principle?
A further important test will be how assurance practice develops. In the first reporting cycle, companies and auditors were both working through a new and complex framework, and assurance approaches continued to mature as methodologies, evidence expectations and interpretations developed. The revised ESRS should provide a clearer starting point, but implementation may still bring surprises. Companies should therefore remain prepared for auditors to request robust evidence, documentation and explanation, potentially beyond what a simplified reading of the requirements might initially suggest.
Are the revisions sufficient to stabilise sustainability reporting expectations?
Hedvig Sundby: They should reduce short-term uncertainty because companies now have an adopted Commission text and a FY2027 application date.
But stability is not complete. One lesson from the original ESRS was that application requirements were not always consistent in function: in some cases they provided useful additional guidance, in others they clarified disclosure expectations, and in others they introduced what effectively looked like additional datapoints or added limited practical value. The revised ESRS appear to address this by relocating application requirements closer to the relevant disclosure requirements and simplifying the overall datapoint architecture, but this cannot be assessed with full confidence until the updated datapoint list, implementation guidance and XBRL taxonomy are available. Official Journal publication, the updated datapoint list and accompanying implementation guidance, XBRL taxonomy, assurance standards, ESRS for third-country undertakings, SFDR developments and future reviews all therefore remain relevant. The practical message for companies is to build reporting processes, controls and documentation that can absorb regulatory change without restarting the exercise each year.
What comes next for CSRD reporters?
The revised ESRS move towards a less granular, more principles-based reporting framework, giving companies greater discretion in applying materiality and presenting decision-useful information. Although the changes are intended to reduce complexity and reporting burden, companies will still need a defensible and proportionate materiality assessment, clear accountability for material data, and sufficient documentation to support significant judgements, estimates and the use of reporting relief.
For CSRD reporters, the challenge extends beyond identifying the applicable disclosures. Companies will need to apply the revised requirements in a way that produces decision-useful for investors and other intended users, supports the applicable assurance process, and remains coherent with financial and wider corporate reporting. Companies can use the period before mandatory application to strengthen the processes, controls and governance needed to apply the revised requirements consistently, while monitoring forthcoming implementation materials and completion of the EU adoption process.