ESRS: what they are, the 12 standards and how to apply them

The European Sustainability Reporting Standards (ESRS) are the set of rules that companies obliged by the CSRD must use to report their sustainability performance. Standard by standard, they define what environmental, social and governance information must be disclosed and how, so that reports are comparable across companies and verifiable by third parties.

The first package (Set 1) was developed by EFRAG and adopted as Delegated Regulation (EU) 2023/2772. It includes 12 standards. Important: that set is in the middle of a revision to simplify it, which we detail below.

What are the ESRS and what are they for?

The ESRS are sustainability reporting standards that are mandatory for companies subject to the CSRD. Their aim is to offer a common framework that avoids a scattering of criteria and makes it possible to compare the ESG performance of one company against another. Among others, they bring these benefits:

• Better risk management: identifying and managing sustainability risks reduces potential financial and reputational impacts.
• Access to finance: investors increasingly use ESG information in their decisions.
• Competitive advantage: communicating transparently sets a company apart from competitors.
• Regulatory compliance: the ESRS sit within the European Green Deal and the CSRD.

Who do they oblige and since when?

The ESRS do not bind anyone on their own: their mandatory status derives from the CSRD. And here the recent change is decisive. The Omnibus package (Directive (EU) 2026/470, in force since 18 March 2026) raised the thresholds and pushed back the deadlines. As of 2026:

• Only large companies with more than 1,000 employees and more than 450 million euros in annual net turnover must apply the ESRS.
• These companies will report on financial years starting on or after 1 January 2027 (first reports in 2028).
• Companies below the threshold may report voluntarily using the lighter VSME standard.

How are the ESRS structured? The 12 standards

The ESRS are organised around the three ESG pillars, plus two cross-cutting standards:

Cross-cutting standards:

• ESRS 1: general requirements. Principles for preparing the report: scope, materiality and information quality.
• ESRS 2: general disclosures. Information common to all topics: strategy, governance and risk management.

Environmental (E):

• ESRS E1: climate change. GHG emissions, mitigation and adaptation.
• ESRS E2: pollution. Impacts on air, water and soil.
• ESRS E3: water and marine resources. Water use and impact on aquatic ecosystems.
• ESRS E4: biodiversity and ecosystems. Impact on habitats and species.
• ESRS E5: resource use and circular economy. Efficient use of resources and waste prevention.

Social (S):

• ESRS S1: own workforce. Working conditions and employee development.
• ESRS S2: workers in the value chain. Labour rights in the supply chain.
• ESRS S3: affected communities. Impact on local communities.
• ESRS S4: consumers and end-users. Product safety and consumer protection.

Governance (G):

• ESRS G1: business conduct. Ethics, anti-corruption and corporate governance.

The simplification of the ESRS (2025-2026)

This is the most important point for understanding the ESRS today. The original set was very demanding: around 1,100 mandatory datapoints. That is why action has been taken in two phases:

• The "Quick Fix" (July 2025): a targeted adjustment that broadened the transitional exemptions for the first obliged companies during the 2025 and 2026 financial years (for example, postponing E4, S2, S3 and S4, or certain anticipated financial effects). We explain it in depth in our article on the changes to the ESRS and the Quick Fix.
• The simplified ESRS: in December 2025, EFRAG delivered to the European Commission a draft of simplified ESRS that substantially reduces the number of mandatory datapoints and removes the voluntary ones. The Commission is expected to adopt it as a delegated act around mid-2026, with application foreseeably from the 2027 financial year.

The underlying idea: fewer datapoints and more flexibility, but the same conceptual framework. Double materiality and external verification remain.

How to implement the ESRS in your company

Putting the ESRS in place requires a structured approach:

1. Double materiality analysis: identify which sustainability topics are material for your company, both for their impact on the environment and for their financial effect. This is the starting point that decides what has to be reported.
2. Data collection and management: gather accurate, reliable and traceable data to back up each disclosure.
3. Integration into strategy: align sustainability objectives with business goals and define monitoring indicators (KPIs).
4. Preparing the report: write a clear report that meets the ESRS requirements, with qualitative and quantitative information.
5. External verification: have the report reviewed by an independent third party to reinforce its credibility.
6. Publication and communication: share the report with your stakeholders.

Frequently asked questions about the ESRS

How many ESRS are there?

The first package (Set 1) includes 12 standards: 2 cross-cutting (ESRS 1 and 2), 5 environmental (E1-E5), 4 social (S1-S4) and 1 governance (G1).

What is the difference between the CSRD and the ESRS?

The CSRD is the directive that requires reporting; the ESRS are the technical standards that say what and how. We compare them in detail in CSRD and ESRS: differences and similarities.

Are all datapoints still mandatory?

Not for every company and not in the original format. The Quick Fix eased the start and the simplified ESRS reduce the number of mandatory datapoints. The specific obligation depends on the size of the company and the timing of the 2026 delegated act.

Do SMEs have to apply the ESRS?

After the Omnibus, SMEs (including listed ones) fall outside the direct obligation and may report voluntarily using the VSME standard. Even so, many receive data requests from their obliged clients.

At Manglai we help you structure your data according to the ESRS and prepare your report under the CSRD in a traceable and auditable way.