Revised ESRS 2026: What Changed and How to Prepare for 2027 Reporting

The implementation opportunity is significant: teams can remove low-value data collection, simplify narrative and focus on decision-useful information. The implementation risk is equally significant: if a company assumes that every old datapoint can simply be deleted, it may overlook changed definitions, new judgement controls, revised boundaries, comparative treatment or information that remains necessary for fair presentation.

Figure 1. Revised ESRS 2026 change logic and transition timeline. London Reporting Academy learning visual.

The Commission’s adoption communication states that mandatory datapoints are reduced by over 60% and total datapoints by over 70%, with estimated reporting-cost reductions of more than 30% per company. The legal act explains the simplification approach: reduce datapoints, prioritise quantitative information over repetitive narrative, distinguish mandatory from voluntary information more clearly, simplify materiality instructions and improve consistency with other EU and global reporting frameworks.

These percentages are portfolio-level indicators, not a promise that every company’s data effort falls by the same amount. A company with complex climate, workforce or value-chain matters may still need extensive evidence. Entity-specific information remains necessary where the standards do not capture a material impact, risk or opportunity with sufficient granularity.

The revised ESRS make a top-down route explicit. Instead of beginning with a line-by-line list of every possible impact, risk and opportunity, the undertaking may use its business model, sectors, activities, geographies, products, relationships, due-diligence findings and risk information to identify the matters that plausibly require detailed assessment. This can avoid unnecessary work, but it does not remove the obligation to test whether plausible matters have been missed.

Information materiality is also made more explicit. After identifying a material topic or material impact, risk or opportunity, the undertaking assesses which prescribed and entity-specific information is material and decision-useful. Except in clearly defined circumstances, the revised text states that non-material information shall not be reported. Supplementary information may be included, but it must not obscure material disclosures.

The revised text emphasises fair presentation of the sustainability statement as a whole, not perfection at every individual datapoint. Application of ESRS is designed to result in fair presentation when the company provides relevant, faithfully represented, comparable, verifiable and understandable information. This increases the importance of balanced narrative, entity-specific disclosures, connected information, transparent uncertainty and a final whole-statement review.

The revised ESRS 1 provides a clearer four-part sustainability statement: general, environmental, social and governance information. It allows an executive summary and a separate EU Taxonomy appendix, and retains conditional incorporation by reference. Presentation choices should be made early because they affect ownership, assurance scope, cross-references, digital tagging and the accessibility of incorporated information.

Revised ESRS 1 retains prior-period comparatives for quantitative metrics and amounts, but provides transition relief. Wave-one undertakings do not have to present comparative information in their first year under the revised regulation for metrics and amounts that are not the same as those required by the 2023 ESRS. Other undertakings are not required to present comparative information in their first year of ESRS reporting. The relief must be applied narrowly and the company should still explain major definition and methodology changes needed to understand trends.

The adopted act provides three practical routes for financial years starting between 1 January and 31 December 2026, once the regulation is in force. Route A uses the 2023 ESRS as amended by the 2025 Quick Fix. Route B uses the full revised 2026 ESRS. Route C uses the 2023 ESRS plus Quick Fix but applies only the listed revised reliefs: the top-down approach; undue-cost-or-effort and value-chain limitation provisions; acquisitions and disposals; non-significant activities; partial value-chain scope; joint operations; the Taxonomy appendix; and the executive summary. The sustainability statement must clearly state the version used.