European Sustainability Reporting Standards (ESRS)

The original ESRS (Delegated Regulation (EU) 2023/2772, “Set 1”) contained around 1,100 data points across 12 standards, a significant proportion of which had to be reported as free-form narrative text rather than as structured metrics.

The simplified version (Delegated Regulation (EU) 2026/1563, finally published on 21 September 2026, entering into force on 10 November 2026 and applicable to financial years beginning on or after 1 January 2027) significantly reduces the number of mandatory data points, prioritises quantitative over narrative disclosures, and provides a clearer distinction between mandatory and voluntary data points.

In addition, ambiguous wording has been clarified and the application of the materiality principle has been further specified, giving companies and auditors a more consistent understanding of what actually needs to be reported.

The basic structure of the 12 standards and the four standard groups remains unchanged – the revision represents a streamlining of the content rather than a structural reorganisation.

For financial years 2026, Article 2 of Regulation (EU) 2026/1563 provides companies with a choice: they may either continue to report under the original version (Regulation (EU) 2023/2772) or already apply the simplified version. From financial years beginning on or after 1 January 2027, the simplified version is mandatory for all companies.

This is not merely a formal choice: companies that are already well advanced in preparing their 2026 sustainability report and have collected data points based on the original version can avoid additional transition work by continuing to use that version. Companies that are still at an early stage, on the other hand, can build their reporting process directly around the leaner, simplified version and avoid duplicating their efforts.

Which option makes more economic sense in an individual case depends on the current project status, the existing system architecture and the group reporting structure. The decision should therefore be made at an early stage, as the version selected must be explicitly stated in the report.

No. Only ESRS 1 (General Requirements) and ESRS 2 (General Disclosures) are mandatory for all companies subject to reporting requirements, without exception, as they establish the fundamental reporting principles and mandatory baseline disclosures on governance, strategy and risk management.

The ten topical standards (E1–E5, S1–S4 and G1), by contrast, are subject to the double materiality assessment: only topics that are considered material both in terms of the company’s impacts on people and the environment and in terms of financial opportunities and risks need to be reported on in detail.

A topic assessed as not material may be excluded entirely, provided there is a comprehensible and documented justification. However, this justification itself is regularly scrutinised critically by auditors and must be methodologically robust.

In practice, most mid-sized companies therefore report fully on only 4 to 7 of the 10 topical standards.

There is partial, but not full, interoperability: According to market analyses, existing GRI reporting is estimated to fully cover around 40% of ESRS data points and partially cover a further 15%; the remaining data points need to be collected separately.

EFRAG and the Global Reporting Initiative (GRI) have formalised their cooperation and published an official interoperability index that shows, data point by data point, where overlaps exist.

In practice, this means that an existing GRI report provides valuable groundwork, as reporting structures and data sources can partly be reused, but it does not replace ESRS-compliant reporting. Conversely, companies reporting under the ESRS automatically fulfil a substantial part of the GRI requirements and can, if desired, additionally state that they report “with reference to GRI.”

Note: These percentages are based on commonly used market analyses rather than legally binding provisions and should therefore be regarded as indicative figures.

No. Originally, the ESRS framework envisaged a second set of sector-specific standards covering industry-specific sustainability topics – for example, for the automotive, textile or energy sectors – in addition to the 12 sector-agnostic standards. As part of the Omnibus simplification package, however, the European Commission has abandoned these plans entirely in order to avoid further increasing the overall number of mandatory data points and to limit the reporting burden for companies.

Going forward, there will be a single, sector-agnostic set of 12 standards for all companies subject to reporting requirements, regardless of their industry or business model.

Instead, companies should take industry-specific characteristics into account as part of the double materiality assessment within the existing topical standards, rather than waiting for additional, separate standards.