European Commission adopts revised ESRS for sustainability reporting

The revised ESRS introduce a more proportionate and flexible reporting framework while preserving core sustainability reporting principles.

The European Commission adopted the Delegated Act on the revised European Sustainability Reporting Standards (ESRS) on 3 July 2026, marking the next step in the European Union (EU) sustainability reporting simplification agenda.

The revised ESRS retain the core principles of sustainability reporting, including double materiality and reporting on material impacts, risks and opportunities across environmental, social and governance topics. At the same time, the standards introduce a more proportionate and flexible framework, with fewer mandatory data points, new reliefs, additional exemptions and a stronger focus on information materiality and fair presentation.

For financial year 2026, reporting entities may continue applying ESRS Set 1, early apply the revised ESRS or apply ESRS Set 1 together with selected reliefs and clarifications from the revised standards. This creates important choices for companies already preparing their 2026 sustainability reporting, particularly where revised requirements could affect methodologies, judgments, documentation, data collection and governance.

The Delegated Act is now subject to scrutiny by the European Parliament and the Council of the EU. If no objection is raised, it is expected to enter into force on 10 November 2026 and apply mandatorily from financial year 2027. Entities should assess the revised standards early and determine the reporting approach that best supports readiness, transparency and credible sustainability reporting.

This publication provides an EY perspective on the main changes introduced by the revised ESRS and their practical implications for preparers.