Revised European Sustainability Reporting Standards
European Union releases the revised European Sustainability Reporting Standards (ESRS), aimed at simplifying sustainability disclosure requirements while maintaining the goals of the European Green Deal.
The revised European sustainability reporting standards will officially come into effect in the 2027 fiscal year, and companies can also choose to adopt them earlier in the 2026 fiscal year.
Related Post: EU Approves European Sustainability Reporting Standards ESRS
Background of Revised European Sustainability Reporting Standards
The European Sustainability Reporting Standards have gone through three stages, namely:
- In November 2022, the European Union adopted the Corporate Sustainability Reporting Directive (CSRD), which includes sustainable information in the scope of disclosure.
- In July 2023, the European Union adopted the European Sustainability Reporting Standard, providing information disclosure templates for businesses.
- In May 2026, the European Union released a revised version of the European Sustainability Reporting Standard, making systematic revisions.
This revision is based on the opinion draft released by the European Financial Reporting Advisory Group (EFRAG) in April 2025, which analyzes the sustainability reports released by companies for the fiscal year 2024. In December 2025, the EFRAG released technical recommendations, proposing simplified disclosure requirements and the introduction of phased arrangements. In March 2026, the European Union passed a comprehensive bill, planning to revise the European sustainability reporting standards within six months. The EARAG believes that the revised standards can reduce disclosure costs for businesses by 28% by 2027, resulting in cumulative savings of € 3.7 billion to € 4.7 billion from 2027 to 2031, equivalent to 44% of total costs.
Contents of Revised European Sustainability Reporting Standards
In substantive evaluation, companies do not need to meet the individual needs of each sustainable information user but rather ensure that the information is helpful to the overall user. Enterprises have more autonomy in evaluation, for example, when defining carbon emission boundaries, they can choose between financial control method (based on enterprise shareholding information) or operational control method (based on actual business operations). In terms of pollution, companies only need to disclose primary microplastics, not secondary microplastics. In terms of climate transition plans, if a company’s disclosed transition goals are inconsistent with 1.5 degrees Celsius, they need to disclose.
These modifications can clarify the previously relatively vague rules and provide additional flexibility for enterprises. After the revision, the number of data points that enterprises need to disclose compulsorily can reduce 61%. These deleted data points have limited value in practice. For data that exists, the standard allows companies to use estimated data and proxy data and disclose them in stages. The standards have also enhanced interoperability with the International Sustainability Standards Board standards and the Global Reporting Initiative standards.
The revised standard will be mandatory from the fiscal year starting after January 1, 2027, and existing companies preparing sustainability reports can choose to apply this standard in advance. The EU will continue to monitor the implementation of standards and provide a basis for future revisions.
Reference:
Commission Seeks Feedback on Revised Sustainability Reporting Standards
