Revised ESRS 2026: What the Changes Mean for Companies in France, Germany and Italy

The EU has spent the past eighteen months dismantling parts of a sustainability-reporting rulebook it only finished building in 2023. The headline change landed on 3 July 2026, when the European Commission adopted the revised European Sustainability Reporting Standards, "ESRS (2026)", cutting mandatory datapoints by 61% and total datapoints by more than 70%. On paper, a dramatic lightening of the load.

The word "simpler" is carrying a lot, though. Double materiality survived the edit intact, and for companies headquartered in France, Germany, and Italy, the datapoint count is only part of the story. The larger variable is how each of those three countries writes the wider Omnibus changes into national law, and they are starting from very different places.

What Actually Got Simpler

Start with what the revised standards do. The Commission's own framing lists four moves: shorter and clearer text, new reliefs and phase-ins, far fewer mandatory datapoints, and tighter interoperability with the ISSB's global standards. All twelve ESRS were rewritten, glossary included.

The datapoint cut is the figure everyone quotes. Mandatory datapoints fall by 61%; counting the voluntary ones removed entirely, the total drops by more than 70%, and the Commission estimates per-company reporting costs fall by over 30%. EFRAG did the technical work across 2025, two rounds of public consultation, advice delivered in December, and the Commission then made its own adjustments in spring 2026 before adopting the final act, which it described as easing the burden further without hollowing out the CSRD.

Here is the catch every serious adviser has flagged. A shorter datapoint list is not a shorter process. The double materiality assessment, the exercise that decides which topics, and therefore which datapoints, a company actually reports, stays mandatory and remains the principal driver of scope. The Commission clarified parts of it and added some flexibility, but it did not remove the assessment or fundamentally lighten it. So the part of CSRD compliance that eats the most time and judgement is precisely the part simplification left largely in place. Fewer boxes to fill; the same hard work deciding which boxes apply to you.

The Datapoints, & What Still Drives Them

Be precise about what "fewer datapoints" means, because it is easy to over-read.

The ESRS never required every company to report every datapoint. Reporting has always been materiality-driven: you disclose what is material to your business and its impacts, and the datapoints follow. What the revision does is shrink the master list, pruning duplication, cutting narrative datapoints that mostly generated boilerplate, removing or downgrading others, and building in reliefs so certain topics and smaller in-scope companies get phase-ins. The mandatory core is leaner and more quantitative.

What it does not do is change the logic. You still run a double materiality assessment, impact materiality and financial materiality together, the two-way lens that separates the CSRD from the ISSB's single, investor-focused view. That assessment still fixes your reporting perimeter. A company that judged twenty topics material under the 2023 standards will not automatically report less under the 2026 version; it will report the surviving datapoints for those same topics. The saving is genuine, but it sits in the drafting and data-gathering, not in the scoping.

Who Still has to Report

The datapoint story sits inside a much bigger scope story, and that is where most companies' exposure actually moved.

The Omnibus I Directive, formally Directive (EU) 2026/470, was published in late February 2026 and took effect on 18 March. It rewrote who the CSRD catches. The old test pulled in large companies above fairly modest thresholds; the new one is far narrower. From financial years beginning on or after 1 January 2027, mandatory CSRD reporting applies to companies with more than 1,000 employees and more than €450 million in net turnover, both, not either. That single change is expected to remove somewhere around 85 to 90% of the companies previously in scope. Listed SMEs drop out. Financial holding undertakings get an exemption.

The timeline shifted with the scope. Wave 1, the large public-interest entities that first reported on 2024 data, continues, but with a wrinkle: Member States may allow wave 1 companies that fall out of scope under the new thresholds to skip reporting for financial years 2025 and 2026, so they do not build reporting machinery for one or two cycles and then stop. Wave 2, the large companies newly meeting the thresholds, now report first on financial year 2027, published in 2028. Non-EU groups follow on FY2028. The revised ESRS apply from FY2027, with voluntary early application available for FY2026.

One more change matters for anyone budgeting for audit: the planned escalation to reasonable assurance was dropped. Limited assurance stays, and the Commission is due to publish harmonised limited-assurance standards by mid-2027. There is also a value-chain shield, companies below the threshold can refuse requests for information that goes beyond the new voluntary standard, capping what in-scope companies can push down their supply chains.

Three Countries, Three Starting Points

Now the part that genuinely differs by where you sit. The CSRD is a directive, not a regulation, it sets a floor, and each Member State transposes it into its own law, sometimes adding to it. France, Germany, and Italy took three visibly different routes on the original CSRD, and those routes shape how the Omnibus lands.

France moved first, and cleanly. It was the very first Member State to transpose the CSRD, via an ordinance of 6 December 2023 and an implementing decree, folding the requirements into the Commercial Code and bringing them into force on 1 January 2024. French companies have run under a settled, on-time regime longer than almost anyone in the bloc. The flip side is that France now has to unwind and re-cut a framework it already built, aligning its Commercial Code provisions to the higher Omnibus thresholds and the new reliefs before the March 2027 deadline. For French wave 1 companies, the live question is whether France offers the FY2025–2026 exemption, since that call is left to national discretion.

Germany is the cautionary tale. It missed the original July 2024 transposition deadline, and then politics intervened: the governing coalition collapsed in late 2024 and the country held early elections in early 2025, leaving the CSRD-Umsetzungsgesetz stranded. A fresh government draft appeared in September 2025, and the process finally started moving in 2026, the CDU/CSU and SPD factions published a joint amendment in late March folding in the Omnibus changes, a Bundestag committee held a public hearing in April, and passage is targeted for around mid-2026. But well into 2026 the law still was not on the books, leaving large German companies in a real legal limbo: an EU obligation with, formally, only the older 2017 regime behind it, so wave 1 entities still filed the old-style non-financial statement for FY2025 and many went further voluntarily. The German draft did try to anticipate what was coming, carrying a temporary carve-out for companies with 501 to 1,000 employees for the 2025 and 2026 years, foreshadowing exactly the scope-narrowing the Omnibus later delivered. The upshot is the messiest of the three: a delayed base regime and the Omnibus changes now having to be settled in national law more or less at once.

Italy sits in between. It transposed the CSRD on time through Legislative Decree No. 125 of September 2024, in force from 25 September, replacing its earlier non-financial reporting decree. Italy stayed close to the directive text, confining national tailoring largely to the sanctions regime and supervisory powers, proportionate penalties, oversight routed through the existing financial-market architecture, rather than gold-plating the substance. Italian wave 1 entities reported on 2024 data from the start of 2025. Like France, Italy now faces a transposition of its transposition: amending Decree 125 to reflect the new thresholds and reliefs, and deciding whether to grant the wave 1 exemption.

The common thread: all three, like every Member State, have until 19 March 2027 to write the Omnibus CSRD changes into national law, the same window in which the new thresholds start to bite. Until each country legislates, some details, including whether the FY2025–2026 wave 1 exemption is available, and how sanctions apply, remain nationally specific. A group operating across all three should not assume the rules resolve identically in Paris, Berlin, and Rome.

What it Means for Reporting Teams

For the roughly one company in seven still firmly in scope, the revision is mostly good news wrapped around a warning. The datapoint diet is real and the drafting burden genuinely eases. But the double materiality assessment still sets your scope, the FY2027 clock is already running, and if you operate across France, Germany, and Italy the national detail will not move in lockstep. Teams that used the simplification pause to keep their materiality work and data systems warm will be ready when their national law finally settles. Teams that read "simplification" as "stand down" will find the assessment, not the datapoint list, waiting for them.

A Readiness Checklist

1. Re-run your scope test against the Omnibus thresholds, more than 1,000 employees and more than €450m net turnover, both required, at group level, not entity by entity.

2. If you fall out of scope, check whether your Member State offers the FY2025–2026 wave 1 exemption before dropping any reporting.

3. Keep your double materiality assessment current; it still drives what you report, revised datapoints or not.

4. Map the 61% mandatory-datapoint reduction against your existing disclosures to see what you can retire and what survives.

5. Decide whether to adopt the revised ESRS voluntarily for FY2026 or wait for mandatory FY2027 application.

6. Track national transposition separately in each country you report in, thresholds, reliefs, and sanctions can differ until 19 March 2027.

7. Plan assurance around limited (not reasonable) assurance, and watch for the Commission's harmonised standard due mid-2027.

8. For German operations, monitor the CSRD-Umsetzungsgesetz, the base regime and the Omnibus changes may land close together.

9. Treat the value-chain data cap as a two-way constraint: what you can ask of smaller suppliers, and what larger customers can ask of you.

This reflects the position in mid-July 2026. The revised ESRS were adopted on 3 July 2026 and are in the European Parliament and Council scrutiny period before entering into force; national transposition of the Omnibus is still under way across most Member States. Confirm the current position against EU and national sources, and take professional advice for your own circumstances.

Sources

European Commission, PwC Viewpoint, Arendt, Council of the EU, DLA Piper, Crowell & Moring, Covington, Linklaters, Freshfields, Hogan Lovells, Hogan Lovells, Taylor Wessing, Ropes & Gray

This article is intended for general professional information and does not constitute legal, financial, or investment advice.