On 3 July 2026, the European Commission adopted a Delegated Regulation amending the European Sustainability Reporting Standards (ESRS), reducing mandatory datapoints by 61% and introducing new reliefs and phase-ins to lower reporting burdens for companies. The revision, part of the Omnibus I simplification package, aims to streamline sustainability reporting while maintaining core Green Deal objectives and improving alignment with international standards and other EU legislation.
The Delegated Regulation, published by the Directorate-General for Financial Stability, Financial Services and Capital Markets Union (FISMA), amends Delegated Regulation (EU) 2023/2772. It reduces the number of mandatory datapoints from over 1,000 to approximately 390, a 61% cut. Companies gain greater flexibility through new reliefs and phase-in periods, and the materiality principle is clarified so that firms only report information deemed relevant to their operations and stakeholders. The revised standards must be applied from financial year 2027, with voluntary early application permitted for 2026.
The simplification represents a trade-off between reducing administrative costs and preserving the comprehensiveness of sustainability information for investors and other users. For businesses, especially small and medium-sized enterprises within the scope, the lower datapoint count and phase-ins reduce compliance costs and legal uncertainty. However, investors and civil society groups may see the reduction as weakening transparency on environmental and social impacts, potentially limiting their ability to compare companies' sustainability performance. National authorities face a transitional period to adapt supervisory practices to the new standards.
The revision follows the Commission's broader Omnibus I package, which sought to cut red tape across EU sustainability legislation. The European Parliament and the Council will now scrutinise the Delegated Regulation; they have the right to object within a specified period. If no objection is raised, the regulation will enter into force and apply from the 2027 financial year.