The European Commission has adopted the revised ESRS. Reporting is being simplified. Expectations are not.

On 3 July 2026, the European Commission formally adopted the revised European Sustainability Reporting Standards. The texts now enter a two-month scrutiny period by the European Parliament and the Council, extendable by a further two months, before they enter into force. For companies preparing for Wave 2 reporting on financial year 2027, the final shape of the ESRS is now clear.

What changed?

The revised ESRS reduce mandatory datapoints by more than 60 percent compared to the 2023 originals. Voluntary disclosure requirements have been removed. The Double Materiality Assessment process has been made more streamlined, with a top-down approach that gives companies more flexibility in identifying and prioritising material topics.

What didn’t change

What did not change is the expectation for what in-scope companies report. The fair presentation objective is now stated more explicitly in the revised text: reported sustainability information must be relevant, complete, neutral, accurate, and verifiable. A reduced number of mandatory disclosures concentrates scrutiny, not disperses it. Each remaining datapoint needs to be more carefully prepared, not less.

Limited assurance from an external auditor is still required. Audit trails, evidence documentation, and internal controls remain necessary. For Wave 2 companies reporting on FY2027, the preparation window is 2026. Data readiness assessments, reporting ownership, control frameworks, and pilot testing of audit trails should be underway now.

“Fewer datapoints also means each one carries more weight. This is not the moment to slow down. It is the moment to focus.”

Jatin Budhraja

Sustainability Advisory Director