The European Union simplifies corporate sustainability rules: the new ESRS reduce the reporting burden

Delegated Regulation (EU) 2026/1563 amending Delegated Regulation (EU) 2023/2772 as regards the simplification of certain sustainability reporting standards was published in the Official Journal of the European Union on September 21, 2026. This new regulation fully replaces Annexes I and II of Delegated Regulation (EU) 2023/2772, incorporating a revised version of the European Sustainability Reporting Standards (ESRS) and an updated glossary, as we explained in this publication.

The reform is part of the regulatory simplification process driven by Directive (EU) 2026/470 (Omnibus I), which reduced the number of companies subject to the sustainability reporting obligations provided in articles 19a and 29a of Directive 2013/34/EU and reviewed and streamlined the applicable disclosure requirements. In line with these objectives, Delegated Regulation (EU) 2026/1563 reduces the number of required datapoints, prioritizes quantitative information over narrative text, clarifies the distinction between mandatory and voluntary requirements, provides clearer instructions on how to carry out double materiality assessments and improves alignment with other EU legislation, while preserving, where possible, interoperability with the main international sustainability standards.

In terms of transitional provisions, between January 1, 2026 and December 31, 2026, companies already subject to reporting standards under Delegated Regulation (EU) 2023/2772 will be allowed to choose between applying either the previously applicable ESRS, as amended by Delegated Regulation 2025/1416, or the new standards introduced by Delegated Regulation (EU) 2026/1563. Companies that choose to continue applying the previous version of the standards during this period may benefit from specific flexibility measures introduced by the new regulation, including the top-down approach to double materiality assessment, rules relating to undue cost and efforts, the cap on value chain analysis in determining materiality, and the possibility of presenting Taxonomy disclosures in a separate appendix, among others. In all cases, undertakings must expressly indicate the regulatory framework applied in their sustainability statement.

The new regulation maintains the general structure of the cross-cutting and topical standards of the ESRS, made up of ESRS 1 (General Requirements) and ESRS 2 (General Disclosures) and the environmental, social and governance standards, while introducing a more streamlined and coherent organization of their content. Delegated Regulation (EU) 2026/1563 will enter into force on November 10, 2026 and will apply to financial years beginning on or after January 1, 2027.

The Corporate Sustainability Reporting Directive (CSRD) required Member States to incorporate its provisions into their national legal systems. However, Spain has yet to complete the transposition process. At the date of this publication, the Sustainability Reporting Bill continues its passage through parliament. The Bill aims to incorporate into Spanish legislation the provisions of both the CSRD and Commission Delegated Directive (EU) 2023/2775, of 17 October 2023, as regards adjustments of the size criteria for undertakings.

As a result, Spain currently remains in a transitional phase pending the formal transposition of the CSRD, and the existing non-financial reporting regime built around the Non-Financial Information Statement (NFIS) therefore continues to apply. 

Once the future Sustainability Reporting Law comes into force, a significant number of large companies will be subject to the reporting requirements established by the CSRD and will have to prepare and publish sustainability information in line with the European sustainability reporting standards adopted by the European Commission.

Both the text of the revised ESRS and EFRAG’s 2026 Draft List of Datapoints, which is currently subject to public consultation, are key references for understanding the practical implications of the reform. Although the European Commission seeks to significantly simplify reporting obligations, the initial implementation of the sustainability reporting requirements under the CSRD, as well as adaptation to the revised ESRS, continue to pose considerable challenges for companies. In light of these changes, it is essential to correctly interpret the new requirements and consistently reflect them in an operational data inventory and in the preparation of the corresponding sustainability report.