Talking about sustainability is easy. Proving your impact? Not so much.

That's exactly why the European Sustainability Reporting Standards (ESRS) exist. These EU standards define what information companies must disclose to report on their environmental, social and governance (ESG) impacts.

Introduced under the Corporate Sustainability Reporting Directive (CSRD), the ESRS have one clear goal: to make sustainability information more transparent, reliable and comparable. In other words, to help investors, business partners and other stakeholders understand not just what companies say they're doing for sustainability, but what they're actually achieving, what risks they face and how they manage their impacts.

In 2026, the European Commission approved a revision of the standards through Commission Delegated Regulation (EU) 2026/1563, published on September 21, 2026. The updated requirements will apply to financial years beginning on or after January 1, 2027, with the option for companies to adopt them early for the 2026 financial year.

The key word behind the revision? Simplification.

The goal isn't to make sustainability reporting less important. It's to make it more effective, without requiring companies to collect vast amounts of information that adds little value.

The revision introduces several changes:

• Fewer reporting requirements: A reduction in the number of required data points.
• More data, less generic storytelling: Greater emphasis on quantitative information rather than purely narrative disclosures.
• Greater clarity: A clearer distinction between mandatory and voluntary disclosures.
• Materiality at the core: Clearer criteria for identifying what information truly matters.
• Greater consistency: Closer alignment with other EU regulations and, where possible, international standards.

The principle is simple: what matters isn't how much a company says about sustainability, but how relevant, reliable and comparable the information it shares actually is.

The ESRS are built around a fundamental principle: double materiality.

This means looking at sustainability from two complementary perspectives.

• Impact materiality: Assesses how a company's activities affect people and the environment, taking into account actual and potential impacts, both positive and negative.
• Financial materiality: Examines how sustainability-related issues may affect a company's financial position, from business performance and cash flows to access to financing.

An issue can be considered material from either perspective. It doesn't have to meet both criteria.

Under the updated ESRS, this assessment becomes more flexible. Companies can start with a high-level analysis of their business model, industry and value chain, then investigate further only where materiality isn't immediately clear.

Once material topics have been identified, companies must determine which information is relevant to disclose.

Not every company needs to report on everything. They need to report on what really matters.

The ESRS framework consists of 12 standards, divided into two categories.

The first two are cross-cutting standards:

• ESRS 1 – General Requirements: Establishes the overarching principles of sustainability reporting, from double materiality to the preparation of disclosures.
• ESRS 2 – General Disclosures: Sets out the general information companies must disclose on governance, strategy, the management of impacts, risks and opportunities, policies, actions, metrics and targets.

The remaining ten are topical standards, organised around the three ESG dimensions.

Environmental (E)

• E1: Climate Change
• E2: Pollution
• E3: Water and Marine Resources
• E4: Biodiversity and Ecosystems
• E5: Resource Use and Circular Economy

Social (S)

• S1: Own Workforce
• S2: Workers in the Value Chain
• S3: Affected Communities
• S4: Consumers and End-users

Governance (G)

• G1: Business Conduct

The topical standards apply based on the results of the double materiality assessment.

Once material issues have been identified, companies need to explain how they're managing them.

This means disclosing the policies they've adopted, the actions they've taken, the resources they've allocated, the targets they've set and the metrics they use to track progress.

For example, a company that identifies plastic pollution as a material issue will need to determine which disclosures are relevant under the standards, particularly ESRS E2 on Pollution and, where applicable, ESRS E5 on Resource Use and Circular Economy.

But sustainability reporting doesn't stop at a company's own operations.

Where necessary to understand material impacts, it must also cover the value chain, from suppliers to downstream business relationships.

The updated ESRS allow companies to use estimates, industry data and other reliable sources when collecting all the information directly isn't feasible, provided that quality and transparency requirements are met.

Another key principle concerns positive impacts: they cannot be used to cancel out negative impacts in a materiality assessment. Both must be assessed separately.

Reducing your own environmental impact and contributing to a positive environmental outcome are both important. But they're not the same thing.

The ESRS represent a step towards a more measurable, transparent and comparable approach to corporate sustainability.

The 2026 revision aims to make this process more accessible without compromising the quality of the information disclosed.

For companies, it means being able to focus their time and resources on the issues that genuinely matter. For stakeholders, it means having more useful information to assess corporate commitments and performance.

Because sustainability shouldn't be about what companies claim. It should be about what they do, what they measure and what they achieve.

Less talk. More action. And above all, more transparency.

European Commission. (2026). Commission Delegated Regulation (EU) 2026/1563 of 3 July 2026 amending Delegated Regulation (EU) 2023/2772 as regards the simplification of certain sustainability reporting standards. Official Journal of the European Union, L series, 21 September 2026. Link