Revised ESRS and Voluntary Sustainability Reporting Standard published in Official Journal of the EU

Context

On 21 September 2026, two delegated regulations completing the revised EU sustainability reporting framework were published in the Official Journal of the EU:

• Commission Delegated Regulation (EU) 2026/1563, which replaces Annexes I and II to Delegated Regulation (EU) 2023/2772 with the revised European Sustainability Reporting Standards and glossary; and
• Commission Delegated Regulation (EU) 2026/1560, which establishes sustainability reporting standards for voluntary use by undertakings protected by the value chain cap (Voluntary Standard).

The revised ESRS Regulation will enter into force on 10 November 2026 and will apply to financial years beginning on or after 1 January 2027, subject to the transitional regime available for financial years beginning in 2026. The Voluntary Standard Regulation will enter into force on 24 September 2026, while its value chain cap will apply to financial years beginning on or after 1 January 2027.

CSRD scope at a glance1 For financial years beginning on or after 1 January 2027, mandatory sustainability reporting applies, at individual or consolidated level as relevant, to undertakings exceeding both €450 million in net turnover and an average of 1,000 employees. Undertakings outside the mandatory scope may report voluntarily using the Voluntary Standard.

Revised ESRS – key takeaways

The revised ESRS seek to reduce datapoints, prioritise quantitative information, distinguish more clearly between mandatory and voluntary datapoints, clarify materiality, improve consistency with other EU legislation and enhance interoperability with global standards.

Key changes for reporting undertakings include:

1. A more focused double materiality assessment
   The revised ESRS expressly permit a top-down approach based on the undertaking’s strategy and business model, sectors, geographies and value chain. A more detailed assessment is required where the conclusion is not evident, but undertakings need not assess every possible impact, risk or opportunity.
2. A stronger information-materiality filter
   Information prescribed by a disclosure requirement or datapoint need not be reported unless it is material. Supplementary information may still be provided, allowing sustainability statements to focus on decision-useful information.
3. New proportionality and reporting reliefs
   The standards allow reasonable and supportable information available without undue cost or effort to be used in areas including materiality, value-chain scope, metrics and financial effects. Further reliefs address acquisitions and disposals, non-significant activities, partial reporting boundaries and certain joint operations.
4. A more proportionate approach to value-chain information
   Reporting extends beyond own operations where necessary to understand material impacts, risks and opportunities. However, information is not required for every value-chain actor, and estimates or indirect information may be used where appropriate. The revised ESRS also reflect the value chain cap.
5. Greater flexibility in presenting the sustainability statement
   Undertakings may place EU Taxonomy disclosures in a separate appendix to the management report and provide an executive summary of key messages. The standards also emphasise avoiding unnecessary duplication.
6. Revised requirements across the topical standards
   All topical standards, as well as ESRS 1 and ESRS 2, have been revised. Changes concern, among other matters, climate transition plans, greenhouse gas emissions, anticipated financial effects, pollution, biodiversity, workforce information and human rights incidents.

The new Voluntary Sustainability Reporting Standard

The Voluntary Standard establishes a standard for voluntary use by undertakings outside mandatory sustainability reporting. It enters into force on 24 September 2026.

It provides a standardised reporting framework for undertakings outside mandatory CSRD scope and supports the value chain cap. For CSRD reporting purposes, that cap limits the information that mandatory reporters may request from value-chain undertakings that did not exceed an average of 1,000 employees in the preceding financial year.

It retains a Basic Module and a Comprehensive Module. Certain datapoints are voluntary for undertakings with 10 employees or fewer, and users are not required to obtain assurance over the information reported. Where the value chain cap applies, protected undertakings may refuse requests exceeding it.

The value chain cap applies to financial years beginning on or after 1 January 2027 and is limited to the datapoints listed in Annex II. It does not restrict information requests required under other EU or national laws.

Revised ESRS – Next steps

Importantly, the revised ESRS Regulation establishes a specific transitional regime for financial years beginning between 1 January and 31 December 2026.

Undertakings within scope may choose between three approaches:

FY 2026 option	Approach
1. Existing ESRS	Continue applying the ESRS set out in Delegated Regulation (EU) 2023/2772, as last amended by Delegated Regulation (EU) 2025/1416
2. Existing ESRS + selected reliefs*	Continue using the existing ESRS while applying eight specified reliefs introduced by the revised standards
3. Revised ESRS	Apply the revised ESRS in full

*The eight available reliefs under the second option concern: the top-down double materiality approach; undue cost or effort and value-chain limitations in the materiality assessment; acquisitions and disposals; the exclusion of non-significant activities from metric calculations; partial value-chain reporting scope; joint operations; presentation of EU Taxonomy disclosures in a separate appendix; and the possibility of an executive summary.

Regardless of which option is selected, the undertaking must clearly state in its sustainability statement which version of the standards it has applied.

What does this mean for reporting undertakings?

For financial years beginning in 2026, reporting undertakings should determine which of the three transitional approaches best fits their circumstances and clearly identify the version applied.

For financial years beginning on or after 1 January 2027, reporting undertakings should assess the impact of the revised ESRS on their double materiality assessment, disclosure inventory, value-chain information, processes and controls.

Undertakings outside mandatory scope may use the Voluntary Standard to structure sustainability information for customers, investors and financial institutions. Mandatory reporters should also review value-chain information requests before the cap applies.

Authors: Rocco Mezzatesta and Enrico Marconi

[1] The thresholds and reliefs described above stem from the EU-level framework. Their practical application in Luxembourg remains subject to the pending implementation of the CSRD and Omnibus I Directive into Luxembourg law, including through bill of law 8370, as amended. Until the relevant Luxembourg legislation is enacted, the existing Luxembourg NFRD framework formally remains applicable.