ESRS Is Being Rebuilt: What the 2025–2026 Simplification Process Means for Reporting Teams

EFRAG delivered its draft simplified ESRS and technical advice to the European Commission on 3 December 2025, following formal mandate from the Omnibus initiative. The revision is substantial: mandatory datapoints cut by 57%, total disclosures reduced by 68%, and overall standard length shortened by over 55%.

Two public consultations are open until 3 June 2026 — one on the revised ESRS and one on a new voluntary reporting standard for entities outside mandatory scope. Commission adoption of both is planned for Q2 2026. Mandatory application begins for financial years starting on or after 1 January 2027.

CSRD-in-scope companies reporting for FY2026 may optionally apply the revised ESRS for that year — a flexibility that some wave-one companies may find operationally advantageous given the reduced reporting burden. Key substantive changes: mandatory datapoints now only required where material, with a strengthened prohibition on reporting immaterial information, and voluntary disclosures removed from the standards entirely.

A dual-track system is emerging. Alongside the simplified mandatory ESRS, the Commission is consulting on a voluntary sustainability reporting standard aimed at SMEs and non-EU groups. For non-EU groups specifically, EFRAG’s work programme includes development of N-ESRS, with an exposure draft from July 2026.

GHG Protocol alignment is the other thread to watch. EFRAG contributed to the Scope 2 consultation and the revised ESRS adjust GHG boundaries toward ISSB alignment. Companies with robust Scope 3 methodologies will be well-positioned. Treating ESRS as a one-time implementation project — rather than an ongoing compliance capability — will misfire at each revision cycle.