Key revisions in the draft revised ESRS of 6 May and what they mean

The European Commission published a draft revised version of the ESRS (European Sustainability Reporting Standard) on May 6, 2026. The draft standard is open for public consultation until June 3, 2026. Once finalised, it will revise and replace the current ESRS published on 31 July 2023 ((EU) 2023/2772). 

 

Aim of the revision 

With this revision the Commission aims to amend the current ESRS by:  

• removing datapoints deemed least important for general purpose sustainability reporting; prioritising, to the extent possible, quantitative datapoints over narrative text; and further distinguishing between mandatory and voluntary datapoints. Compared to the July 2023 version, the draft ESRS reduces the mandatory datapoints by over 60% and cuts total datapoints by over 70%.  
• providing clear instructions on how to apply the materiality principle to ensure that companies are only required to report material information. This is expected to reduce the risk that assurance service providers unintentionally encourage reporters to disclose information that is not necessary or companies dedicate disproportionate resources to the materiality assessment process. 
• improving consistency with other pieces of Union legislation, including financial services legislation; and  
• taking account, to the greatest extent possible, of interoperability with global sustainability reporting standards. 

Targeted revisions compared to November 2025 version 

In addition to the revisions that EFRAG already introduced in its technical advice in November 2025 (please refer to our previous blog on these changes), the Commission made some targeted modifications by providing additional clarifications and granting certain additional flexibilities.  
 
The May 2026 draft introduces the following major revisions:  

Materiality and materiality assessment 

• The objective of the standards is to focus on decision-useful information for users.
• A report does not have to meet the specific information needs of each individual user. 
• Explicitly mentioning that information that is not material “shall not” be reported (except in defined cases).
• Emphasising the possibility of using a top-down approach to conclude if materiality or non-materiality of impacts, risks or opportunities (IROs) for a topic or sub-topic is evident based on an analysis of a company’s strategy, business model, sector(s) of operation, geographies, and the features of its upstream and downstream value chain. If the materiality or non-materiality of one or more IROs is not evident, then these are subject to further assessment. The draft also clarifies that the materiality conclusion can be reached at topic level for combined impacts, risks and opportunities. 

Fair presentation  

• Fair presentation applies to overall sustainability statement, not to individual datapoint. In other words, the sustainability statement, taken as a whole, provides a fair presentation of material impacts, risks and opportunities. Fair presentation might also lead to the need to disclose entity-specific information.  

Level of aggregation and disaggregation 

• Introducing greater discretion on the need to consider geographical context in the materiality assessment. Reporting does not have to be at the same disaggregation level as the disaggregation level for materiality assessment. 

Omission of information  

• Allowing omitting information that would be seriously harmful to the commercial position. It explicitly describes the cases and conditions. 

Anticipated financial effects 

• Reporting anticipated financial effects is likely to involve estimates. These can be updated without being considered an "error”.
• Omission rules also apply to anticipated financial effects (if they are seriously harmful to the commercial position). 

GHG emissions  

• Introducing flexibility to use financial or operational control approach for reporting boundary (Our note on this: Various parties have already objected to this revision as it makes comparability more difficult. Therefore, it is not certain if this revision will be in the final version).  

Climate transition plans  

• Explicitly requiring disclosure when the targets in the transition plan are not aligned with the Paris Agreement objective of 1.5°C.

Emission of pollutants 

• Decision on which pollutants are material for reporting should be determined by managerial assessment (giving more flexibility to consider activities and sector of operation). 

Human rights & discrimination incidents 

• Requiring only “substantiated” incidents of human rights and discrimination incidents to be reported. (Not all ongoing judicial or non-judicial proceedings are necessarily substantiated.)  

Other 

• Requiring only primary microplastics to be reported, not secondary.  
• Introducing 1-year phase-in for reporting on substances of very high concern for users of articles containing these substances.
• Providing more alignment with the CSDDD (Corporate Sustainability Due Diligence Directive) that includes technical modifications for better due diligence alignment.
• Introducing new provisions related to asset management activities to avoid reporting on information that is not relevant for the investments managed. This applies to asset managers where they make investments on behalf of their clients that are subject to fiduciary duty, without retaining risks or rewards of ownership.  

Switching to the revised ESRS in financial year 2026 

Companies must use the revised ESRS from financial year 2027 and they can choose to already use it for financial year 2026. (This opens the possibility for the Wave 1 companies to already switch to the draft ESRS for preparing their 2026 sustainability statements). 

Value chain cap 

In parallel, on the 6th of May 2026, the Commission also published a draft regulation on voluntary reporting standards based on EFRAG’s VSME (sustainability reporting standards for voluntary use by companies not falling within the scope of CSRD).  
 
The draft regulation has consequences for CSRD-companies requesting data from their supply chain partners. The value chain cap prohibits companies subject to CSRD from requesting their value chain partners (that have 1,000 employees or fewer) to provide more sustainability information than the content of the “voluntary standard”. It is important to note that the value chain cap applies only in the context of fulfilling CSRD reporting obligations and does not affect information requests for purposes other than sustainability reporting under CSRD. In other words, companies and financial institutions can continue to ask for additional information for other purposes. With the proposed changes, it will not be possible to ask value chain partners to disclose various information such as GHG emission targets, description of transition policies or practices, water consumption in water-stressed areas, the extent of use of non-employee workers, the scope of human rights policies, and many more.  
 
The Commission aims to adopt the final version of the ESRS in Q2 2026, followed by a 2-month no-objection scrutiny period by the European Parliament and the European Council. This would mean that the final version of the delegated act revising the ESRS is expected to enter into force in Q3 2026.