EU Adopts Revised ESRS — Mandatory Data Points Cut by Over 60%, FY2027 Application

The European Commission formally adopted its revised European Sustainability Reporting Standards on July 3, 2026, under two Delegated Acts that substantially simplify the original ESRS Set 1 while preserving double materiality, environmental, social, and governance coverage as core principles. The mandatory data point reduction of more than 60% — driven by the "Omnibus" simplification package — relieves companies from the most granular prescriptive requirements while retaining the structural obligation to report on material impacts, risks, and opportunities. Companies reporting for financial year 2026 now face a three-way choice: continue applying original ESRS Set 1, early-apply the revised standards, or apply Set 1 alongside selected reliefs from the revised framework — a decision that implicates methodology, documentation, data collection, and governance choices that must be made before year-end. If the Delegated Acts survive Parliamentary and Council scrutiny without objection, the revised ESRS apply mandatorily from financial year 2027, expected to enter into force November 10, 2026. For legal advisers, the immediate work is helping clients navigate the FY2026 optionality decision and restructure compliance programs that were built around the original data-point architecture.