How the simplified ESRS will be adopted: EU process, timeline, and what companies should watch

The adoption phase will determine whether the amended ESRS are implemented largely as drafted by EFRAG or whether the Commission introduces targeted adjustments affecting reliefs, phase-ins, and datapoint requirements. These decisions are critical for companies preparing for CSRD reporting, including those closing data gaps, designing internal controls, and planning their sustainability reporting strategies.

Process, timeline, and key issues to watch

The European Commission’s launch of the adoption process follows EFRAG’s delivery of the amended ESRS to the Commission in December 2025.

While political negotiations dominated the Omnibus I simplification package, the ESRS adoption process now underway is different in nature. The simplified ESRS will be adopted as a delegated act and therefore follow a distinct procedural pathway.

The room for maneuver is narrower than during legislative negotiations. However, decisions taken at this stage will determine whether the amended ESRS are adopted largely as drafted or whether the Commission makes targeted adjustments within the constraints of the delegated act process in response to concerns raised during EFRAG’s drafting process.

The legal basis for adopting the simplified ESRS

In March 2025, the European Commission mandated EFRAG to simplify the ESRS. This triggered an accelerated standard-setting process, culminating in the delivery of EFRAG’s draft amended ESRS to the Commission on 3 December 2025.

In its technical advice, EFRAG highlighted extensive datapoint reductions, additional reliefs, and expanded phase-ins aimed at reducing reporting burden, while stating that the core objectives of the CSRD are preserved.

Under Article 29b of the Accounting Directive, as amended by the CSRD, the Commission is empowered to adopt the simplified ESRS through delegated acts. In doing so, it must:

• Take account of EFRAG’s technical advice
• Consult EU Member States
• Consult eight EU bodies identified in the Accounting Directive, including the European Central Bank (ECB), the European Banking Authority (EBA), and the European Securities and Markets Authority (ESMA)

In a speech at EFRAG’s conference unveiling the simplified ESRS on 4 December 2025, the Commissioner for Financial Services and the Savings and Investments Union, Maria Luís Albuquerque, confirmed the Commission’s intention to adopt the new standards by mid-2026. This timeline would allow companies to apply them for financial year 2027 and, for those that wish to do so, voluntarily for financial year 2026.

How the adoption of the delegated act works in practice

Step 1: Technical consultation phase

The first phase of the adoption process consists of a formal consultation with Member States and the eight designated EU bodies. This phase is administered by DG FISMA.

On 11 December 2025, the Commission sent a letter to the Accounting Regulatory Committee (ARC) and the Member States Expert Group on Sustainable Finance (MSEGSF), formally requesting their opinion on EFRAG’s draft amended ESRS.

Key milestones in this phase include:

• 28 January 2026: Joint online briefing by EFRAG to ARC and MSEGSF
• 6 February 2026: Deadline for submitting feedback to the Commission

This consultation also covers the eight EU bodies listed in the Accounting Directive, including the ECB, the EBA, and ESMA.

Unlike the Omnibus I negotiations, the European Parliament’s JURI committee is not formally consulted during the technical adoption process. However, there is an informal collaboration through which JURI may provide input. However, informal exchanges between the Commission and Parliamentary committees may still occur, as is common practice.

Step 2: Commission assessment and possible adjustments

Once feedback is received, the Commission assesses whether targeted technical adjustments are warranted before finalising the text. This represents the most consequential decision point in the adoption process.

Although often described as “technical”, this phase is where the Commission determines whether to:

• Preserve the amended ESRS largely as drafted by EFRAG, or
• Introduce targeted changes in response to concerns raised by the ECB, the EBA, and other stakeholders during the drafting process

EFRAG acknowledged in its cover letter that it deliberately left some decisions to the Commission, notably in relation to phase-ins for Wave 2 companies.

Step 3: Adoption of the delegated act by the Commission

Once the Commission finalizes the text, it will adopt the ESRS as a delegated act and publish it on the Commission website, together with a summary explanation of changes made during the consultation process.

Step 4: Scrutiny by the European Parliament and the Council

Following adoption, the delegated act is subject to a formal scrutiny period by the European Parliament and the Council. This period normally lasts two months and may be extended once, for a maximum of four months.

During scrutiny:

• The Parliament and the Council cannot amend individual provisions
• They may only accept or object to the delegated act as a whole

In practice, this means that by the time the amended ESRS reach scrutiny, substantive policy and technical choices have already been locked in during the Commission’s consultation and drafting process.

Step 5: Entry into force

If neither the Parliament nor the Council objects within the scrutiny period, the delegated act is published in the Official Journal and enters into force automatically.

Given Commissioner Albuquerque’s timetable for adoption by mid-year 2026, followed by a 2-month-plus-2-month scrutiny period, entry into force is likely to occur sometime in Q4

Why the adoption stage matters for companies and investors

Although less visible than EFRAG’s drafting process or the Omnibus I legislative negotiations, the adoption phase is important for the future shape of ESRS reporting.

EFRAG’s cost-benefit analysis highlights a divergence between preparer and user perspectives. While preparers are overwhelmingly positive—citing cost savings, improved clarity, and no expected impact on access to green finance—investors and financial institutions express significant concerns.

According to the analysis:

• 67% of investors and financial institutions surveyed expect the amended ESRS to reduce information quality
• 75% cite concerns about loss of information due to the use of reliefs
• 52% cite reduced comparability
• 45% cite loss of critical data in ESRS E1 Climate Change

These findings closely mirror concerns raised during EFRAG’s drafting process by the ECB and the EBA, particularly regarding permanent reliefs, reduced quantitative disclosures, and risks to the sustainability data ecosystem underpinning the CSRD.

Key issues to watch during the simplified ESRS adoption process

1. Reliefs without time limits

The amended ESRS introduce reliefs that are not time-bound, allowing companies to omit certain disclosures where obtaining the information would require undue cost or effort.

• ESRS 1, paragraph 94 allows companies to omit information on IROs, value-chain data, metrics, and anticipated financial effects due to undue cost or effort. This goes beyond the relief available under IFRS.
• ESRS 2, paragraph 29 allows companies to omit quantitative information on anticipated financial effects of material risks or opportunities if they lack the skills, capabilities, or resources to provide it.

In practice, these provisions could operate as permanent rather than transitional reliefs.

During EFRAG’s drafting process, the ECB and the EBA warned that the cumulative effect of these reliefs could undermine comparability, financial risk assessment, and the development of a reliable EU sustainability data ecosystem. Whether the Commission tightens, clarifies, or leaves these provisions unchanged will therefore be closely watched.

2. Datapoint reductions and technical recalibration

EFRAG highlights a 61% reduction in mandatory data points compared with the original ESRS (71% including voluntary datapoints), alongside broader proportionality mechanisms and simplifications.

Several stakeholders have cautioned that the cumulative effect of datapoint reductions, reliefs, and phase-ins may extend beyond burden reduction and begin to affect decision-useful information, particularly for climate and financial risk analysis.

The adoption phase represents the final opportunity for the Commission to make limited technical recalibrations without reopening the standards wholesale.

3. Phase-ins, including Wave 2 companies

The amended ESRS introduce additional phase-ins for Wave 1 companies, notably delaying quantitative disclosures on financial effects and substances of concern until 2029.

EFRAG explicitly left the question of phase-ins for Wave 2 companies to the Commission, citing the link to Level 1 negotiations and future reporting cohorts. How the Commission resolves this issue will be critical for Wave 2 companies preparing for first-time CSRD compliance in financial year 2027.

What happens next?

The consultation phase, running into early February 2026, will shape the Commission’s final approach.

While a further broad round of simplification appears unlikely, targeted adjustments remain possible, particularly where concerns are well evidenced and aligned with the objectives of the CSRD.

As Commissioner Albuquerque has stated, simplification is not intended to lower ambition, but to ensure that sustainability reporting remains reliable, comparable, and decision-useful while remaining implementable in practice. Whether the final simplified ESRS achieve that balance will be determined in the months ahead.

Don’t wait to take action on your sustainability

For businesses still looking to take action on their data, though, the ESRS (simplified or original set) is an invaluable framework for determining the potential strategic upsides in your sustainability data and where there are potential risks hidden within yours or your suppliers’ operations. 

Leveraging ESRS remains a no-regrets move for many businesses, even those who have fallen out of scope. Now that we have left the “wait and see” period behind, leading businesses throughout Europe are already moving ahead with a focus on strategic impact.

We’ve created a summary of the key changes to help you move forward with confidence on your own sustainability goals for the year. It’s attached for free below. No sign-up, just direct value.