The European Commission has published the delegated act on the revised European Sustainability Reporting Standards. Fewer datapoints, transitional options for the 2026 financial year, application from 2027: companies now need to identify the reporting framework that best fits their situation.

The delegated act on the revised European Sustainability Reporting Standards was adopted on 3 July 2026, one month after the end of the consultation phase led by the European Commission.

The delegated act is accompanied by two annexes. Annex I contains the revised sustainability reporting standards. Annex II contains the acronyms and glossary.

A two-month objection period now begins, which can be extended by up to two additional months, before publication in the Official Journal of the European Union. Once published, the delegated act will be immediately applicable in the national laws of Member States, without requiring transposition.

Revised ESRS: what changes are confirmed?

The reduction in datapoints is confirmed: the revised standards include around 70% fewer datapoints overall, including around 60% fewer mandatory datapoints.

Four main categories of changes have been made to the first set of ESRS.

The first concerns feasibility and proportionality improvements. These include limiting information requirements to primary microplastics only, introducing management judgement for pollutant disclosures, adding a new phase-in approach for substances of very high concern, and providing an exclusion related to asset management.

The second category relates to increased flexibility. Companies are given greater discretion on aggregation and disaggregation, a clearer “top-down” materiality assessment, provisions on omissions, and flexibility in greenhouse gas reporting boundaries, with the possibility to use either financial control or operational control.

The third category aims to strengthen international alignment. The revised ESRS move closer to the ISSB on greenhouse gas reporting boundaries and reinforce alignment with the Corporate Sustainability Due Diligence Directive, known as the CSDDD.

The fourth category concerns clarifications intended to improve legal certainty and avoid excessive disclosure. These include clarifying the concept of fair presentation, limiting human rights incident disclosures to substantiated and verified incidents, and clarifying the treatment of estimates in anticipated financial effects.

When do the revised ESRS apply?

The new provisions of the revised ESRS apply to financial years beginning on or after 1 January 2027.

The central question therefore concerns the 2026 financial year.

It had previously been understood that a mixed approach combining the two sets of ESRS would not be available for “Wave 1” companies. The European Commission has ultimately introduced a set of reporting options for the 2026 financial year, including a hybrid alternative under Article 2 of the delegated regulation.

2026 reporting: three options for companies

For their 2026 financial year, companies have three options.

• Option 1: apply the first set of ESRS, which remains in force.
• Option 2: apply a hybrid approach, meaning the first set of ESRS with certain simplifications introduced by the revised ESRS.
• Option 3: voluntarily apply the revised ESRS.

The hybrid option provides flexibility for companies that do not wish to conduct a full gap analysis this year and prefer to maintain consistency in their 2027 publications.

In all cases, companies will need to clearly state which option they have applied in their sustainability statement.

Hybrid option: what simplifications are available?

The delegated regulation provides eight types of simplifications. Companies may choose to apply them in full or in part for their 2027 publications covering the 2026 reporting year.

1. A more “top-down” double materiality assessment

The “top-down” approach, rather than a “bottom-up” approach, allows companies to avoid a systematic materiality assessment at the level of each impact, risk and opportunity.

Materiality can instead be assessed from the company’s strategy and business model, for each topic or sub-topic, taking into account sectors of activity, geographical areas and the characteristics of the upstream and downstream value chain. No further analysis is required when the conclusion on materiality or non-materiality is evident (ESRS 1, § 27).

2. Excessive costs and efforts in the value chain

Companies may rely on the concept of excessive costs and efforts, and may limit the value chain assessment within the double materiality process.

They can use reasonable and supportable information available at the reporting date without excessive costs or efforts. They are not required to assess every possible impact, risk and opportunity across all areas related to their activities and upstream or downstream value chain.

The focus can be placed on areas where material impacts, risks or opportunities are likely to exist. Companies may also use regional averages or sector data instead of information obtained directly from value chain actors (ESRS 1, § 32 et 33).

3. Organisational scope and acquisitions or disposals

The organisational scope may take into account new acquisitions and disposals (ESRS 1, § 74 et 75).

If a subsidiary is acquired during the reporting period, the company may defer its inclusion until the following year, both for the double materiality assessment and for the sustainability statement.

If a subsidiary leaves the group during the reporting period, the company may adjust the reporting scope as if the change had taken place at the beginning of the current financial year.

4. Exclusion of non-significant activities

Certain activities may be excluded from the calculation of indicators when they are not significant, when they are not related to the main impacts, risks and opportunities, and when their exclusion does not alter the relevance of the data (ESRS 1, § 90).

5. Partial reporting on the value chain

A company may partially report on the value chain when it cannot provide certain data or reliable estimates without incurring excessive costs or efforts.

An important exception remains for ESRS E1-8 indicators related to gross greenhouse gas emissions across scopes 1, 2 and 3 (ESRS 1, § 91).

6. Exclusions for certain joint activities

Joint activities over which the company does not exercise operational control may be excluded from the calculation of certain indicators under ESRS E2, E3, E4 and E5 (ESRS 1, § 92).

7. A separate appendix for EU Taxonomy information

Information related to the EU Taxonomy may be presented in a separate appendix within the management report (ESRS 1, § 106).

8. An executive summary at the beginning of the sustainability statement

An executive summary may be included at the beginning of the sustainability statement.

It may contain the key messages regarding material environmental, social and governance impacts, risks and opportunities, as well as how they are managed (ESRS 1, § 110).

What about the 2027 financial year?

All companies subject to the CSRD will need to prepare their 2028 sustainability report, covering the 2027 financial year, on the basis of the revised ESRS.

kShuttle’s business and product teams have been mobilised since February 2025 to support clients through this major evolution of the CSRD reporting framework.

Looking to discuss how to manage your sustainability information with our experts? Let’s talk.

Further reading

To complete this analysis, read our article on the EFRAG State of Play 2026 report, which examines ESRS reporting practices and the maturity of companies under the CSRD.

Read also: ESRS: what the EFRAG 2026 report really says about corporate maturity

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