The Relationship Between CSRD and ESRS
CSRD determines who reports, where the information is presented, which principles apply, and how assurance is organised. ESRS explain what to disclose and how to structure the information. The directive creates the legal duty; the standards create a common reporting language. The European Commission adopts ESRS through delegated acts. In July 2026, the Commission adopted revised standards and a voluntary standard for undertakings outside mandatory scope. Before implementation, confirm the delegated act's effective date and the relevant reporting period.
The Architecture of the Standards
The system contains cross-cutting standards and topical standards. The cross-cutting provisions address preparation principles, double materiality, boundaries, connectivity, and general disclosures on governance, strategy, and the IRO identification process. Topical standards cover environmental (climate, pollution, water, biodiversity, circular economy), social (own workforce, value-chain workers, communities, consumers), and governance (business conduct) matters.
What Changed in the 2026 Revision
According to the European Commission, the revised ESRS reduce mandatory datapoints by more than 60% and total datapoints by more than 70%. They include additional flexibilities and clearer rules on materiality, boundaries, and estimates. The reduction does not allow companies to disregard significant impacts — a well-founded materiality process and high-quality information about management of material matters remain central.
Materiality as a Filter and the IRO Logic
ESRS should not be applied as a mechanical checklist. The company first identifies impacts, risks, and opportunities (IROs), assesses double materiality, selects material topics, and only then determines required disclosures. A conclusion that a topic is not material must be supportable — absence of owned factories does not necessarily make climate immaterial where major emissions arise in procurement or product use. The report should tell a coherent story: IRO → policy → actions → targets → metrics, not a table of KPIs sitting separately from management decisions.
Preparing High-Quality Data and How to Organise an ESRS Project
Each disclosure needs an owner, definition, unit, perimeter, source, and control. Value-chain data may be incomplete — reasonable estimates can be used with transparent methodology, and the company should maintain a data-improvement plan rather than repeating a weak estimate indefinitely. A practical ESRS project includes a requirements catalogue, material-topic map, disclosure matrix, metric register, and reporting close calendar. Every disclosure should have a business owner, data owner, controller, and approver. Monitor legislation, Commission decisions, and technical explanations — especially important in 2026 due to the transition from the first to the revised ESRS set.
ESRS are not a form-filling checklist; they are a structure for explaining material impacts, risks, opportunities, and management responses. Effective implementation begins with materiality and data architecture and ends with a connected, verifiable report.