Simplified ESRS (ESRS 2.0): Frequently Asked Questions – 2026

The Simplified ESRS – widely referred to as ESRS 2.0 – are the revised European Sustainability Reporting Standards adopted by the European Commission on 3 July 2026 through Delegated Regulation C(2026) 5010 final, amending Delegated Regulation (EU) 2023/2772 (the first set of ESRS) as part of the EU Omnibus I simplification package. The Simplified ESRS keep the familiar architecture – ESRS 1 General Requirements, ESRS 2 General Disclosures, ten topical standards (E1 Climate Change, E2 Pollution, E3 Water and Marine Resources, E4 Biodiversity and Ecosystems, E5 Resource Use and Circular Economy, S1 Own Workforce, S2 Workers in the Value Chain, S3 Affected Communities, S4 Consumers and End-users, G1 Business Conduct) and a glossary of 194 defined terms – but significantly reduce the number and granularity of required disclosures.

The Simplified ESRS enter into force after a scrutiny period of two to four months by the European Parliament and the Council of the EU, followed by publication in the Official Journal of the European Union. The delegated act was adopted on 3 July 2026; unless the Parliament or the Council objects, the standards are expected to apply from the financial year 2026/2027 reporting cycles. Companies should treat the adopted text as their working baseline now, as material changes during scrutiny are unlikely.

Under the CSRD as amended by the ‘Stop the Clock’ Directive (EU) 2025/794 and the Omnibus I Directive (EU) 2026/470, ESRS 1 paragraph 122 defines two groups based on when a company’s first mandatory sustainability reporting year starts – note that the dates refer to the financial year being reported on, not to the year the report is published.

Wave-one undertakings are companies whose CSRD reporting obligation applies for financial years starting between 1 January 2024 and 31 December 2026. In practice, these are the former NFRD reporters – large public-interest entities with more than 500 employees – which reported on financial year 2024 in reports published in 2025 and have continued reporting since.

Other undertakings are all remaining companies in scope, whose reporting obligation starts for financial years beginning on or after 1 January 2027 – meaning their first sustainability statements are published in 2028. This later start reflects the ‘Stop the Clock’ Directive, which postponed the second and third reporting waves by two years, and the Omnibus I Directive, which raised the size thresholds determining who is in scope.

The distinction matters beyond timing: the phase-in reliefs in ESRS 1, paragraphs 124–127, are keyed to these two groups (see the question on phase-in reliefs below).

1. The five most important simplifications in ESRS 2.0 compared with the 2023 ESRS (Delegated Regulation (EU) 2023/2772) are:

2. Flexible report structure: the default four-part structure (general, environmental, social, governance) can be replaced by an alternative structure with a reasoned explanation (ESRS 1, paragraph 105).

3. Substantially fewer datapoints across all standards, with the deepest cuts in the social standards S2, S3 and S4.

4. The Minimum Disclosure Requirements (MDR-P, MDR-A, MDR-M, MDR-T) are replaced by leaner General Disclosure Requirements (GDR-P, GDR-A, GDR-M, GDR-T) within ESRS 2.

5. Application Requirements (ARs) now follow directly after the Disclosure Requirement they support, instead of sitting in a separate appendix.

6. New reliefs, including an ‘undue cost or effort’ provision, partial reporting boundaries for metrics, and exclusion of non-significant activities from metric calculations.

In the Simplified ESRS, the Minimum Disclosure Requirements (MDRs) of the 2023 ESRS are replaced by General Disclosure Requirements (GDRs): GDR-P for policies, GDR-A for actions and resources, GDR-M for metrics and GDR-T for targets, all located in ESRS 2 General Disclosures. GDRs apply whenever a topical standard or an entity-specific disclosure covers policies, actions, metrics or targets. If an undertaking has no policies, actions or targets for a material topic, it must disclose that fact.

Yes. Double materiality remains the foundation of ESRS reporting in the Simplified ESRS. ESRS 2 General Disclosures stays mandatory for all undertakings irrespective of materiality. Materiality is then assessed per topic and per Disclosure Requirement. A notable refinement in ESRS S1 Own Workforce, paragraph 1: if own workforce is material, the workforce characteristics disclosures S1-5 – and S1-6 where non-employees are connected to material impacts – must be applied.

ESRS 1 paragraphs 125–127 of the Simplified ESRS grant three sets of transition reliefs. Wave-one undertakings above EUR 450 million net turnover and 1 000 employees may omit all Disclosure Requirements of ESRS E4, S2, S3 and S4 for financial years before 2027, and most information on anticipated financial effects before financial year 2028. Wave-one undertakings below those thresholds may omit the Disclosure Requirements of all topical standards for financial years before 2027. Other undertakings (first reporting for financial years from 2027) may omit E4, S2, S3, S4 and most anticipated financial effects for their first two reporting years. Omitted topics that are material still require a brief explanation under ESRS 2, paragraphs 7–10.

The value-chain cap (ESRS 1, paragraph 66) limits the sustainability information a reporting company may request from ‘protected’ companies in its value chain – such as listed SMEs – to the datapoints of the voluntary SME standard (VSME, adopted in parallel as Delegated Regulation C(2026) 5011). The cap also applies to non-EU value-chain partners of equivalent size.

TomorrowWorks classified all 475 individual requirements (paragraphs and Application Requirements) of the final Simplified ESRS: approximately 46% are qualitative (narrative), 17% quantitative (metrics, monetary amounts, percentages), 8% mixed, and the remainder framing text (objectives and interaction provisions). ESRS S1 Own Workforce and ESRS E1 Climate Change carry most of the data load – headcount, pay gap, health and safety, energy and GHG metrics. Notably, the social standards S2, S3 and S4 contain no purely quantitative requirements in the simplified text: they are almost entirely narrative.

No. Under the Simplified ESRS, climate-related scenario analysis is optional. ESRS E1, AR 6 states that the undertaking may use climate-related scenario analysis – for example where it already performs such analysis under another framework – but it is not required. Climate-related risk identification itself remains required where climate change is a material topic.

If climate change is material, ESRS E1-1 requires disclosure of the transition plan for climate change mitigation, including whether GHG emission reduction targets are compatible with limiting global warming to 1.5°C. An undertaking without a transition plan must disclose that fact. Companies making GHG-neutrality claims involving carbon credits must explain that such claims neither hinder nor undermine their GHG emission reduction targets (ESRS E1, paragraph 35 – wording tightened in the final act).

Use the scrutiny window as preparation time: refresh or perform the double materiality assessment, then run a structured ESRS gap assessment against the final adopted text – first determine which standards apply, then assess materiality per Disclosure Requirement, then screen individual paragraphs, and finally assess coverage gaps for what remains in scope. Prioritise quantitative requirements early: data pipelines have the longest lead time.

TomorrowWorks supports companies and consultancies with CSRD/ESRS reporting, double materiality assessments and expert-curated toolkits – including an ESRS 2.0 Gap Assessment tool built on the final adopted standards, paragraph by paragraph. Contact Nishant at nishant@tomorrowworks.eu.