Commission Opens Feedback on Simplified ESRS: What Changed and What Comes Next

The European Union ("EU") has taken a further step in its bid to simplify the ESG reporting regime for EU and non-EU companies.

On May 6, 2026, the European Commission (the “Commission”) launched a one-month public feedback period soliciting comments on new draft (i) revised European Sustainability Reporting Standards ("ESRS") and (ii) a voluntary sustainability reporting standard for smaller companies. The feedback period is open until June 3, 2026.

The proposal follows the simplification requirements of the Omnibus Directive (see our prior discussion here). The revised ESRS would substantially reduce required disclosures while preserving the requirement to apply a “double materiality” reporting regime and report decision-useful information on material sustainability impacts, risks and opportunities. The Commission has reported that the changes would reduce (i) mandatory data points by more than 60%, (ii) total data points by more than 70%, and (iii) expected reporting costs per company by more than 30%.

The most significant changes are to the scope and mechanics of reporting. Companies would have a clearer basis for excluding immaterial information, more flexibility to conduct materiality assessments on a top-down basis, and greater discretion over how far to disaggregate information. The draft also provides or clarifies exemptions for disclosing commercially sensitive information, unavailable or incomplete data, acquisitions and disposals, and certain phased-in information.

Value-chain reporting would also be narrowed. Companies would still need to report value-chain information where necessary to understand material impacts, risks and opportunities, but the draft clarifies that companies are not expected to collect information from every value-chain participant. Also, for smaller value-chain partners, the proposed voluntary standard would operate as a cap: CSRD reporters generally could request sustainability information from value-chain undertakings with 1,000 or fewer employees only up to the limits of that standard.

The draft also makes targeted changes across several topic areas: 

• Climate-related revisions include greater flexibility in defining GHG emissions boundaries and clearer disclosure where transition plan targets are not aligned with a 1.5°C pathway;

• Environmental changes include limiting microplastics reporting to primary microplastics and using a company’s activities and sector to determine which pollutants are material;

• For chemicals, the draft adds a phase-in for certain Substances of Very High Concern (SVHC) reporting;

• Social disclosures would be narrowed in some areas and include new sector-specific relief. Human rights and discrimination incident reporting would focus on substantiated cases and ongoing proceedings; and

• For asset managers, the draft includes provisions intended to avoid reporting on managed investments where the manager does not retain the relevant risks or rewards.

After the feedback period ends, the Commission plans to adopt the two standards as “Delegated Acts” and submit them to the European Parliament and Council.  Assuming no objections are raised, the new standards will then enter into force.