How to implement the ESRS step by step under the 2026 simplified standards

Implementing the ESRS means closing the double materiality assessment, running a gap analysis at datapoint level, connecting your data sources, documenting traceability and submitting the result to external assurance. The simplified ESRS, adopted on 3 July 2026, keep twelve standards and cut more than 60% of mandatory datapoints. They apply to financial years starting on or after 1 January 2027.

What changed with the simplified ESRS adopted on 3 July 2026?

On that date the European Commission adopted the delegated act with the revised ESRS and, in parallel, a second delegated act with the voluntary sustainability reporting standard for companies outside CSRD scope. The concrete changes are these:

• Fewer fields. More than 60% of mandatory datapoints and more than 70% of total datapoints are removed.
• Same structure. ESRS 1, ESRS 2 and the ten topical standards remain. No standard disappears.
• More data, less prose. The revision prioritises quantitative information over lengthy narrative.
• More manageable materiality. Materiality assessment requirements are simplified, with more room to consider geographic context.
• Better international fit. Interoperability with the ISSB standards is reinforced.

As of August 2026 the delegated act is under European Parliament and Council scrutiny, a two-month period extendable by a further two. If it is not rejected, it enters into force once published in the Official Journal. It applies to financial years starting on or after 1 January 2027, and a transitional regime exists for the 2026 financial year: companies can apply the existing ESRS, early-apply the revised ones, or apply the existing ones with certain reliefs. The earlier detail is in our analysis of the changes to the ESRS.

Who has to apply the ESRS, and from when?

Scope is set by Directive (EU) 2026/470, the Omnibus package, published in the Official Journal on 26 February 2026, in force since 18 March 2026 and with a transposition deadline of 19 March 2027.

If your company has fallen outside mandatory scope, the sensible route is the voluntary standard. We explain it in our guide to simplified standards for SMEs.

Which ESRS standards do you have to apply?

Twelve in total: two cross-cutting and ten topical. You only report on the topical standards that come out material from the double materiality assessment.

How to implement the ESRS step by step

1. Close the double materiality assessment

This is the step that conditions all the others, because it determines which topical standards you will report on. Apply the principle of double materiality: the company's impact on people and the environment, and the effect of sustainability factors on its financial position. Output: a list of material topics with documented thresholds and sign-off by the governance body.

2. Run the gap analysis by datapoint, not by standard

A gap analysis at standard level is useless for planning. Go down to datapoint and classify each one into three states: available and traceable, available but untraceable, non-existent. Output: a roadmap with an owner and a deadline for every gap.

3. Connect data sources, starting with the digitised ones

Energy and fuel invoices, ERP, the HR system and waste manager records. These deliver results within weeks. Output: a monthly Scope 1 and 2 calculation with no manual intervention.

4. Launch value chain data collection

Scope 3 and ESRS S2 depend on third parties, and third parties are slow. Prioritise suppliers by weight in spend, and bear in mind that companies with up to 1,000 employees can limit what they hand over. Output: a live campaign with a measured response rate.

5. Document traceability before writing anything

Every figure needs its source, the version of the factor applied, a date and attached evidence. Output: a single repository where the assurer finds the evidence without asking for it.

6. Draft the sustainability statement and choose the indicators

The narrative (policies, actions, targets, transition plan) is human work. The sustainability indicators you pick should cover the material datapoints and nothing else. Output: a full draft with the remaining gaps identified.

7. Prepare for external assurance

The CSRD requires independent verification. Directive (EU) 2026/470 has fixed limited assurance as the definitive level and removed the option of requiring reasonable assurance in future. The international reference standard, ISSA 5000, approved by the IAASB in November 2024, applies to periods beginning on or after 15 December 2026. Output: a verified report and a corrective action plan.

Can you prepare an ESRS report in Excel?

For a first inventory, yes. For a full cycle with external assurance, no. Excel fails at four specific points that assurers always test.

• Traceability per data point. You cannot attach the invoice to the cell or record who changed it and when.
• Emission factor versioning. Updating a factor destroys the traceability of the previous calculation, and the base year stops being comparable.
• Multi-site consolidation. Every site ends up with its own template and its own criteria, and the totals stop reconciling with the financial boundary.
• Change and access control. Anyone can overwrite a cell without leaving a trace.

The conclusion is not to buy the most expensive tool, but to move those four points into a system with an audit log and leave Excel for what it does well: ad hoc analysis and drafts. The minimum viable setup for leaving Excel has five pieces: a single evidence repository, a versioned emission factor library, automated invoice capture, a named owner per data source, and a close calendar aligned with the financial one. The full sequence is in our guide to ESG reporting automation.

What must be ready twelve months before the first report?

On the digital format: the CSRD requirement to publish in XHTML with Inline XBRL tagging stands, although effective tagging depends on the Commission adopting the technical standard with the digital taxonomy being prepared by ESMA.

Common mistakes when implementing the ESRS

• Starting to draft the report before materiality is closed.
• Running the gap analysis at standard level and discovering mid-project that dozens of datapoints are missing.
• Treating the datapoint cut as an excuse to lower rigour. There are fewer fields, but the ones left still demand evidence.
• Asking small suppliers for more information than the rules allow you to require, burning the relationship without getting the data.
• Calling the assurer once the report is already closed instead of running a pre-review.
• Not aligning the sustainability calendar with the financial close, so the two reports contradict each other.

Frequently asked questions about implementing the ESRS

When do the simplified ESRS come into force?

The delegated act was adopted on 3 July 2026 and is under Parliament and Council scrutiny. If not rejected, it enters into force once published in the Official Journal and applies to financial years starting on or after 1 January 2027, with early application possible in 2026.

How many datapoints do you have to report now?

It depends on which topics come out material, but the mandatory set has been cut by more than 60% and the total by more than 70% compared with the original ESRS.

What is the difference between the CSRD and the ESRS?

The CSRD is the directive that says who must report and with what level of assurance. The ESRS are the standards that say exactly what must be disclosed. We cover it in CSRD and ESRS: differences and similarities.

Is external assurance required from the first report?

Yes. The CSRD requires limited assurance from the first reported financial year, and that level is now definitive following Directive (EU) 2026/470.

What if my company leaves mandatory scope?

It can report voluntarily using the standard adopted on 3 July 2026. That is the sensible answer when large customers, banks or public tenders keep asking for sustainability data, which happens regardless of the CSRD.

How long does ESRS implementation take?

A full cycle from materiality to verified report reasonably takes twelve months. Companies that already have a calculated, traceable carbon footprint cut that curve substantially.

At Manglai we solve the most expensive part of the process, which is data governance: automated capture from invoices and ERP systems, versioned factors, multi-site consolidation and evidence attached to every figure. If you are preparing your first cycle, the starting point is our CSRD compliance solution, and the full regulatory context is in our guide to the Omnibus package.