2026 Simplified ESRS: What Changes for Financial Years Starting January 1, 2027

Commission Delegated Regulation (EU) 2026/1563 replaces the ESRS in Annex I and the glossary in Annex II of Delegated Regulation (EU) 2023/2772. It was adopted on July 3, 2026, published on September 21, 2026, and enters into force on November 10, 2026. It applies to financial years beginning on or after January 1, 2027. For FY2026, you may apply it early, stay on ESRS set 1 as amended in 2025, or stay on set 1 while using eight listed reliefs. Whatever you choose, you must say which version you used.

Timeline at a glance

Recital 7 explains the gap between adoption and entry into force: the Accounting Directive requires reporting standards to enter into force no earlier than four months after adoption. Recital 8 gives the reason for the FY2027 start: preparers need time and compliance costs should stay low.

The companion regulation, Delegated Regulation (EU) 2026/1560, matters for the same calendar. It sets a voluntary standard, based on Commission Recommendation (EU) 2025/1710, for undertakings outside mandatory reporting. Its Article 3 also defines the value-chain cap: the most an in-scope reporter may require from value-chain undertakings with up to 1,000 employees on average in the preceding financial year. The cap comprises only the datapoints listed in its Annex II, with a separate list for undertakings with 10 employees or fewer, and applies from financial years beginning on or after January 1, 2027.

Your FY2026 options under Article 2

For financial years starting between January 1 and December 31, 2026, undertakings within the scope of Delegated Regulation 2023/2772 may choose between:

• Option A1: ESRS set 1 as last amended by Delegated Regulation (EU) 2025/1416 (the "quick fix");
• Option A2: the simplified ESRS in Annex I to Delegated Regulation 2026/1563, in full;
• Option B: set 1 as amended by the quick fix, plus eight reliefs taken from the new ESRS 1: the top-down materiality approach (para. 27), undue cost or effort and value-chain limits in the materiality assessment (paras. 32-33), acquisitions and disposals (paras. 74-75), metrics for non-significant activities (para. 90), partial reporting scope of the value chain (para. 91), joint operations (para. 92), Taxonomy disclosures in a separate appendix (para. 106), and the executive summary (para. 110).

What the simplification is meant to achieve

Recital 2 of the regulation sets six aims, in line with Omnibus I:

1. reduce the number of datapoints;
2. prioritize quantitative datapoints over narrative text;
3. further distinguish between mandatory and voluntary datapoints;
4. give clear instructions on how to apply the materiality principle;
5. improve consistency with other EU legislation;
6. take account of interoperability with global sustainability reporting standards, to the greatest extent possible.

Recital 3 lists the 13 areas where the Commission departed from EFRAG's technical advice. They include materiality, fair presentation, omission of information, anticipated financial effects, GHG emissions, climate transition plans, microplastics, substances of very high concern and coherence with the due diligence directive. The texts in the base do not give a total datapoint count for either version, so be wary of headline percentages that cannot be traced to the regulation.

Practical differences from ESRS set 1

The new ESRS 1 also restates the permitted omissions: seriously prejudicial commercial information in exceptional cases, trade secrets, classified information, and information protected by other law. Each omission is subject to datapoint-level disclosure and reassessment at every reporting date (para. 100). AR 47 adds that the fact that non-EU undertakings do not report the same information cannot justify an omission.

Phase-ins: wave-one versus "other" undertakings

The new chapter 10 distinguishes wave-one undertakings, which report for financial years from 2024 to 2026, from other undertakings, which first report from FY2027. Voluntary early use of ESRS does not start the phase-in clock (para. 121).

• Other undertakings (para. 127): may omit ESRS E4, S2, S3 and S4 for their first two financial years. They may also omit anticipated financial effects for two years, and the quantitative part of those effects for four years (with exceptions in E1-11). They have three years for quantitative substances-of-concern data, and one year for SVHC data and listed S1 datapoints.
• Wave-one undertakings above EUR 450M and 1,000 employees (para. 125): E4, S2, S3 and S4 may be omitted for financial years before 2027, anticipated financial effects before 2028, and quantitative anticipated financial effects before 2030.
• Comparatives (para. 124): other undertakings need no comparatives in their first year. Wave-one undertakings need none for metrics that differ from set 1 in their first year under the new standards.
• Value chain (para. 123): for the first three years, if value-chain information is unavailable, explain your efforts, the reasons and your plans.

When a whole topical standard is phased out, ESRS 2 (paras. 8-9) still requires you to say whether the topic was assessed as material and, if so, to give summarized information on it.

Planning your FY2026-FY2027 calendar

• Confirm that the reporting entity is still in scope from FY2027 (both EUR 450M turnover and more than 1,000 employees), or whether it falls out.
• Decide the FY2026 option before your materiality refresh, since Option B reliefs mostly affect the assessment.
• Map the datapoints you report today against the new standards to find metrics without comparatives.
• Align supplier questionnaires with the value-chain cap, which applies from FY2027 to suppliers with up to 1,000 employees.
• Agree the version with your assurance provider early.

To check a specific provision, ask the CSRD & ESRS knowledge base, for instance: "For financial years beginning in 2026, can a company choose to apply the new simplified ESRS one year early instead of waiting for FY2027?" Answers cite the text of Delegated Regulation 2026/1563 on EUR-Lex.

Content reflects the official texts indexed on October 5, 2026. It explains the rules and is not advice for a specific undertaking.