European Sustainability Reporting Standards: the revised ESRS, read as law

The European Sustainability Reporting Standards (ESRS) are the twelve standards that set out what a company in scope of the EU Corporate Sustainability Reporting Directive discloses in its sustainability statement: two cross-cutting standards (ESRS 1 and ESRS 2) and ten topical ones (E1 to E5, S1 to S4 and G1).

They are an EU delegated regulation, first adopted by the European Commission on 31 July 2023 as Delegated Regulation (EU) 2023/2772 and revised by Delegated Regulation (EU) 2026/1563, published in the Official Journal on 21 September 2026.

Delegated Regulation (EU) 2026/1563 enters into force on 10 November 2026 and applies to financial years beginning on or after 1 January 2027, so a calendar-year company reports under it for the first time in 2028.

Entry into force is not application: nobody has to use the revised set before financial year 2027.

For financial years beginning in 2026 a company may use the 2023 ESRS as last amended by Delegated Regulation (EU) 2025/1416, the revised ESRS in full, or the 2023 ESRS with eight named reliefs taken from the revised ESRS 1.

Article 2(2) of Delegated Regulation (EU) 2026/1563 requires it to state in its sustainability statement which version it applied.

From financial years beginning on or after 1 January 2027, EU undertakings and EU parent groups that exceed both a net turnover of €450 million and an average of 1,000 employees during the financial year.

Directive (EU) 2026/470 set that cumulative test.

The Commission estimates that about 6,753 companies remain in scope, roughly 85% fewer than under the original directive.

Not as UK companies.

A UK group is reached only through the EU: an EU subsidiary that exceeds the thresholds in its own right reports under ESRS, and under Article 40a an EU subsidiary or branch above €200 million net turnover of a group with more than €450 million EU turnover in each of the last two years publishes a group-level impacts report from financial year 2028, against a separate standard, ESRS-40a, still in draft.

UK-listed companies report against UK SRS on a comply-or-explain basis under the FCA’s final rules.

The Commission states that the revision cuts mandatory datapoints by more than 60% and total datapoints by more than 70%, the second figure larger because every voluntary datapoint was deleted.

The 61% figure in circulation is EFRAG’s, for its own draft.

The Commission publishes no absolute count, so a figure such as “about 500 datapoints” has no primary source.

Yes.

Article 19a(1) of the Accounting Directive still requires information on the company’s impacts on sustainability matters and on how sustainability matters affect the company, and revised ESRS 1 calls reporting under the two perspectives the double materiality principle.

What changed is the method: a top-down assessment is now permitted, and information that is not material must not be disclosed.

No. Directive (EU) 2026/470 deleted the Commission’s power to adopt sector-specific standards, which had been due by 30 June 2026.

The Commission may still publish non-binding sector guidance.

No. The sustainability statement needs a limited assurance opinion, and Directive (EU) 2026/470 removed the Commission’s power to adopt reasonable assurance standards.

The Commission must adopt limited assurance standards by 1 July 2027.

For an undertaking within Article 19a(1) of the Accounting Directive, yes: using the ESRS is the legal route to a sustainability statement, and from financial years beginning on or after 1 January 2027 that means exceeding both €450 million net turnover and an average of 1,000 employees.

For everyone else it is voluntary, and the voluntary standard in Delegated Regulation (EU) 2026/1560 exists for those who want a smaller text.

The CSRD, Directive (EU) 2022/2464, is the directive that amended the Accounting Directive to say who reports and when.

The ESRS are the delegated regulation that says what the sustainability statement contains.

The directive needs national law; the regulation applies directly.

IFRS S2 covers climate only, from the single, financial perspective.

ESRS E1 covers climate inside a twelve-standard set built on double materiality.

EFRAG and the IFRS Foundation say the definition of financial materiality is aligned and the climate disclosures are largely comparable, but their guidance is not a statement of equivalence and maps the 2023 ESRS, not the revised set.

ESRS-40a is the draft standard for the group-level impacts report that Article 40a of the Accounting Directive requires from an EU subsidiary or branch of a large non-EU group.

EFRAG opened consultation on its exposure draft on 23 July 2026, closing 31 October 2026, with technical advice due to the Commission in January 2027.

It covers impacts only, and the draft includes an optional mixed approach that limits disclosure of impacts other than climate to EU-related impacts.

The reports start from financial years beginning on or after 1 January 2028.

Article 19a(3) of the Accounting Directive makes an undertaking in a reporter’s value chain with an average of 1,000 employees or fewer in the preceding financial year a protected undertaking.

It may decline requests for CSRD reporting data that go beyond the voluntary standard, and Article 3(2) of Delegated Regulation (EU) 2026/1560 limits the cap to the datapoints in its Annex II.

A request made for due diligence, financing or a contract is outside the cap.

It applies from financial years beginning on or after 1 January 2027.

ESRS 1 sets the general requirements: how the statement is prepared, the double materiality principle and the reliefs.

ESRS 2 sets the general disclosures that apply across topics, such as the basis for preparation in BP-1 and the governance disclosure GOV-1.

Under BP-1 the undertaking states that its sustainability statement has been prepared in accordance with ESRS as applicable at the end of the reporting period.

Both apply to every company in scope, while the ten topical standards apply only where the topic is material.

Revised ESRS 1 paragraph 24 says an undertaking shall not disclose information prescribed by a datapoint if that information is not material.

Under the 2023 text, immaterial information was simply not required.

Under the revision it is prohibited, which is why a statement should be shorter and why an assessment that kept every datapoint as a habit now has to justify it.

Not yet.

The management report still goes in the single electronic reporting format, but recital (24) of Directive (EU) 2026/470 says that until mark-up rules for sustainability reporting are adopted under Delegated Regulation (EU) 2019/815, undertakings should not be required to mark up their sustainability reporting.

The tagging layer is deferred, not settled.

There is no EU-level penalty for a defective sustainability statement.

Sanctions sit in national law, and member states have until 19 March 2027 to transpose the Omnibus changes, so the penalty for the same failure differs by country.

The 3% of worldwide turnover cap often quoted belongs to the separate due-diligence directive, not to reporting.

Not yet.

EFRAG’s Knowledge Hub states, as at 30 September 2026, that no implementation guidance is available for the revised ESRS.

The guidance that exists, such as EFRAG IG 1 on the materiality assessment, was written for the 2023 text and predates the revision.

The legal text is in the Official Journal, which EUR-Lex serves: Delegated Regulation (EU) 2023/2772 for the original set and Delegated Regulation (EU) 2026/1563 for the revision.

EFRAG’s Knowledge Hub serves the revised standards interactively, one page per standard, and EFRAG’s Set 1 technical documentation holds the 2023 text.

Both versions are public and free, so no purchase or sign-in is needed.

Not automatically.

ESRS applies double materiality and twelve standards; UK SRS applies single, financial materiality and two standards.

EFRAG and the IFRS Foundation say the definition of financial materiality is aligned, but their interoperability guidance is not a statement of equivalence and maps the 2023 ESRS, not the revised set.

Climate is where most data can be shared, with differences such as Scope 2: ESRS E1 asks for location-based and market-based figures, UK SRS S2 for location-based.